Australian Economy

Strong but not booming: Given catch-up growth, it will hopefully surge north of 60.

By Gareth Aird, head of Australian economics at CBA: Key Points: The Australian economy staged a remarkable recovery over the second half of 2020 and we expect strong economic growth to continue over the next two years.

Ross Gittin’s and Labor’s Andrew Leigh have lamented the dramatic increase in Australia’s environmental footprint: Dr Andrew Leigh, a federal Labor politician and former economics professor, is just publishing the paper Putting the Australian Economy on the Scales in the Australian Economic Review.

Via AFR: Rich Lister and iron ore magnate Andrew Forrest says he’ll spend “whatever it takes” to return the 35 per cent of production which is offshore at boot and clothing maker RM Williams, back to Australia.

The Australian Bureau of Statistics (ABS) has released export and import prices for the December quarter, which portends a big lift in Australia’s terms-of-trade when the national accounts are released in early March.

The growing number of companies that have voluntarily agreed to refund their JobKeeper payments has prompted Labor to urge the federal government to hold an inquiry into the scheme.

The weekly ANZ-Roy Morgan Consumer Confidence index has been released, which registered a 2.3% weekly rise to 111.2 points, moving the index toward the historical average (112.6): Confidence in economic conditions surges Consumer confidence rose 2.3% on back of a sharply improved assessment for both current and future economic conditions.

From Roy Morgan Research: In December Australians expected inflation of 3.6% annually over the next two years, up 0.2% points from November and up 0.4% points on the record low in August.

JP Morgan notes that physical office occupancy rates across Australia’s capital cities remain well below levels prior to the COVID-19 pandemic, despite the fact that workers are gradually returning to on-site work.

Running hard now on catch-up growth: Business conditions rose further in December to its highest level since late 2018 at 14pts.

Via Westpac: • The six-month annualised growth rate in the WestpacMelbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from 4.94% in November to 4.18% in December.

After being negative on the Australian economy throughout most of 2020, we shifted gears late in the year claiming the Australian economy was “poised for a V-shaped recovery”.

Via Crikey: This weekend brought a lot of heated bluster from old media (and its political representatives) about Google’s supposed threat to democracy.

Joanna Howe, Associate Professor at the University of Adelaide Law School, has given an insightful interview on ABC Radio challenging the farming industry’s heavy reliance on seasonal migrant workers.

CBA has released its household spending intentions for December, which remain bullish as Australians emerge from COVID restrictions: Summary The Household Spending Intentions (HSI) series for December 2020 showed that at the end of last year there was a very welcome improvement in spending intentions for Travel, Health & Fitness, Entertainment and Motor Vehicles.

Businesses in Sydney’s northern beaches area have called for JobKeeper to be extended, while the Restaurant & Caterers Association has deepened calls for an industry-focused ‘HospoKeeper’: Restaurant and Caterers Association chief executive Wes Lambert wants an industry-focused “HospoKeeper”.