Australian Economy

Via Credit Suisse: The Australian interim reporting period has been the strongest since 2010.

From The Australian: Labor will step up its push to protect penalty rates arguing the Fair Work Commission’s ruling to align Sunday rates with Saturday in some industries is untenable.

From UBS: Resurgent commodities lifted trade from a record deficit to a record surplus Australia’s basket of $A commodity prices has surged ~50% from a decade-low in Dec- 15 – led by the two largest exports, iron ore and coal.

The AFR ran a happy piece on the weekend that filled up some blank space but really deserves a bit of a caning: It’s up to business now to carry the flag.

Last week, the local gas price, which determines prices in the National Electricity Market (NEM), rebounded to $11.01/Gj, roughly 400% higher than the long term average.

By Leith van Onselen The full speech that Ken Henry gave to CEDA yesterday has been released, and Dr Henry pulled no punches in admonishing the Government’s negligence in managing Australia’s mass immigration program.

From Morgan Stanley: Today the Fair Work Commission announced cuts to Sunday and Public Holiday wage rates.

By Leith van Onselen Let’s recall Tony Abbott’s comments last night on why Australia should reduce immigration: Mr Abbott said it was time to end the “big is best” thinking of federal Treasury and scale back immigration “at least until housing starts and infrastructure have caught up”, in order to ease house prices.

Via UBS: Q4 capex dropped 2.1% q/q in Q4-16 (after -3.3%), still slumping 15.5% y/y Private real capex fell more than consensus again, down 2.1% q/q in Q4-16 (UBS: -2.5%, mkt: -0.5%), after -3.3% in Q3-16 (was -4.0%). This continued the ‘capex cliff’ with the y/y relapsing to a poor -15.5% (after -13.1%).

When foreign supermarket chains ALDI and Costco entered Australia, did Coles and Woolworths welcome them with open arms?

From the AFR: Our politicians have dug themselves into deep trenches from which they fire insults designed merely to cause political embarrassment.

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released the Average Weekly Earnings (AWE) data for the six months to November 2016.

Capex expectations are out and are still a problem for growth: Estimate 5 for total capital expenditure in 2016-17 is $112,155m. This is 9.0% lower than Estimate 5 for 2015-16. The main contributor to this decrease is Mining (-27.0%).

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released data on capital expenditures (capex) for the December quarter of 2016, which registered another 2.1% seasonally adjusted fall in capex volumes over the quarter and a 15.5% decrease over the year (see below table).

There is nothing that the Insufferable Left loves more than to hollow out manufacturing, except perhaps to poke fun at Donald Trump.

By Leith van Onselen Doomsayer.

By Leith van Onselen In July last year, Ken Henry raised the alarm on Australia’s excessively high population (immigration) growth, noting that “our population is growing at a rate that exceeds the capacity of traditional models of planning, building and pricing access to the nation’s infrastructure and housing”.

Via The Australian: BHP Billiton chief executive Andrew Mackenzie, who took a $US105 million cost hit at the Olympic Dam copper and uranium mine in South Australia after recent blackouts, says the nation’s renewable energy schemes could raise costs and reduce power security while having no impact on emissions.

Oh dear: More than 2000 megawatts of thermal generation failed during NSW’s power scare earlier this month, when AGL asked Australia’s largest smelter to curtail its production for more than three hours to avoid blackouts across the state.

From Westpac: Construction work has been trending lower over recent years as mining investment falls back to more normal levels.