Australian Economy

Domainfax today covers Sydney’s international student boom: …with such rapid growth – and big dollars – comes risk.

Via the excellent Damien Boey at Credit Suisse: The pulse of credit is weak and fading We have just published an article (attached) about weakness in the pulse of Australian credit creation.

By Leith van Onselen Yesterday, I praised the Grattan Institute’s detailed new report entitled Housing affordability: re-imagining the Australian dream, which lays-out a sensible blueprint for housing reform across Australia.

By Leith van Onselen The December quarter Business Indicators report, released yesterday, includes aggregate wages & salaries data, which according to the ABS measures “gross earnings before taxation and other deductions” and “includes provisions for employee entitlements”.

By Martin North, cross-posted from the Digital Finance Analytics Blog: The RBA has quietly revised down the household debt to income ratio stats contained in E2 statistical releases and their chart pack.

Just in from the ABS: Company profits beat expectations, whereas wages & salaries also rose.

Melbourne Institute monthly inflation for February is in at 0.1% month-on-month and 2.1% year on year: Trimmed mean was -0.2% MoM and 2.2% YoY.

From AIG: • The Australian Industry Group Australian Performance of Services Index (Australian PSI® ) fell by 0.9 points to 54.0 points in February 2018 (seasonally adjusted), indicating a softer rate of expansion compared to January 2018.

Paul Kelly is horrified: The true heart of Donald Trump is exposed.

By Leith van Onselen MB has long derided Australia’s ‘free trade agreements’ (FTAs) for their complexity and deleterious efficiency impacts, their anti-competitive measures around intellectual property, as well as some FTAs containing clauses enabling trading partners to sue sovereign governments (called Investor-State Dispute Settlement or ISDS).

Via Sarah Dankert and company over the weekend, who have done a great job exposing the abuses of the franchising system: Wayne Hong, who owns a Michel’s Patisserie – another RFG chain – in Knox Shopping Centre in Wantirna, in Melbourne’s east, said he was not surprised to learn of the mass store closures.

More retail carnage from Retail Food Group: This another of those immigration-exposed businesses that is accused of relying upon unsociable assumptions for franshisee operations.

From the Jericho sell-out today: Australia’s union movement is in a period of soul-searching.

More today from the excellent Damien Boey at Credit Suisse: Slightly disappointing capex numbers for 4Q Business capex came in slightly below expectations, falling by 0.2% in 4Q.

By Leith van Onselen Back in 2014, HSBC released research based on surveys of 800 companies across Asia to gauge the take-up and usefulness of free trade agreements (FTAs) to Australian businesses, and found that only around 1-in-5 exporters are utilising them.

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released data on capital expenditures (capex) for the December quarter, which registered a 0.2% seasonally adjusted fall in capex volumes over the quarter but a 4.0% increase over the year (see below table).

The ABS has released December QTR capex and the news is better if not strong: Estimate 5 for total capital expenditure in 2017-18 is $114,599m. This is 2.5% higher than Estimate 5 for 2016-17. The main contributor to this increase is Other Selected Industries (8.7%).

Via AIG: ▪ The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) decreased by 1.2 points to 57.5 points in February, indicating further expansion in the month but at a slightly slower pace than in January (seasonally adjusted).

In last year’s 2018 preview, The Great Housing Reckoning, MB wrote: …as the year deepens, China’s macro economy will slow and underlying demand for steel will wane, meaning bulk commodities will be very exposed after stocks build in H1.

Harvey Norman today joins the retailer carnage: Sales growth was actually OK at 4.1%: But there’s margin pressure probably from discounting: Macquarie analysts say Harvey Norman’s interim result was “weak from an underlying perspective” and there was “no clear cause of the Australia franchising margin reduction”.

My new favourite economist, Damien Boey at Credit Suisse, has given the Australian outlook a complete rogering in the past few days.