ECONOMIC INDICATORS – AUSTRALIA

Michele Levine, CEO, Roy Morgan Research comments on the fall in Business Confidence in December

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Original article by Michele Levine, Roy Morgan Research
Market Research Update – Page: Online : 9-Jan-17

Business Confidence fell slightly in December after three straight months of increases – down 2.6pts (-2.2%) to 114.1. The fall in Business Confidence came after Donald Trump secured an unexpected victory in the US Presidential Election in November while in early December the ABS announced Australia’s GDP had decreased 0.5% in the September quarter – the first contraction in Australian GDP for over five years. Both Australia and the US face a continuing problem of high real unemployment and under-employment: In the US (over 20% according to President-elect Trump); and in Australia the latest Roy Morgan November employment estimates show Australian real unemployment of 1.199 million (9.2%) and under-employment of 1.1 million (8.4%). These figures show that the Reserve Bank of Australia should still be cutting Australian interest rates in 2017 (now at 1.50%) rather than thinking about raising them.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Cash upbeat as job figures defy gloom

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Original article by David Uren
The Australian – Page: 4 : 16-Dec-16

Australia’s official unemployment rate rose from 5.6 per cent in October 2016 to 5.7 per cent in November. It has increased by 0.7 per cent in the last 12 months, although the Budget had forecast a 1.75 per cent increase. The figures show that some 39,300 full-time jobs were created in November, but the number of full-time positions fell by more than 45,000 overall in the first 11 months of the year. The youth unemployment rate has risen from 12.5 per cent to 14.6 per cent.

CORPORATES
AUSTRALIA. DEPT OF EMPLOYMENT, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Gary Morgan comment on Roy Morgan real unemployment unchanged at 9.2% in November

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Original article by Gary Morgan, Roy Morgan Research
Market Research Update – Page: Online : 14-Dec-16

Australia’s continuing high level of real unemployment and under-employment – now above 2 million for a 14th straight month – has persistently indicated the weakness in the broader Australian economy, which has now been confirmed by Australia’s first quarter of negative GDP growth since the March quarter 2011. The ABS announced last week that Australian GDP shrunk 0.5% in the September quarter 2016. The election of Donald Trump in the US last month proves that politicians who take the concerns of their people seriously will find electoral success. Trump consistently asserted during his campaign that real unemployment in the US was far higher than the figures quoted by the official Bureau of Labor Statistics – over 20%, and perhaps even over 30%. The Turnbull Government must learn the lesson provided by Trump’s election without delay.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Australian real unemployment steady at 9.2% (1.199m Australians); Under-employment down 1.5% to 8.4% (1.1m)

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 14-Dec-16

In November 2016 a total of 2.299 million Australians, 17.6% of the workforce, were either unemployed (1,199,000) or under-employed (1,100,000). This is down 237,000 (down 2%) from November 2015. Unemployment is comparable to a year ago with 1.199 million Australians now unemployed (up 13,000 in a year but steady at 9.2% due to overall growth in the workforce). These real unemployment figures are substantially higher than the current ABS figure for October 2016 (5.6%). In November, the Australian workforce increased to 13,046,000 (up 92,000 since November 2015), and total employment increased to 11,847,000 (up 79,000). Full-time employment is now 7,950,000 – up 374,000 from a year ago (7,576,000 in November 2015). In contrast, part-time employment has decreased by 295,000 to 3,897,000 over the past year (an average of just under 25,000 per month). The lower part-time employment contributed to the fall in under-employment; now 8.4% of Australians 1,100,000 (down 250,000 since November 2015) are under-employed (down 2%).

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIAN BUREAU OF STATISTICS

ANZ-Roy Morgan Consumer Confidence plunges to 113.4 (down 5.2pts) after shockingly weak GDP data

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 14-Dec-16

ANZ-Roy Morgan Australian Consumer Confidence fell a sharp 4.4% to 113.4 in the week ended 11 December 2016. The headline index is now at its lowest level since May. The details were negative with views on "economic conditions over the next 12 months" and "now is a good time to buy a household item" showing the sharpest declines. Households’ views towards their finances compared to a year ago edged down 0.7%, while households’ views towards their future finances slipped 2.1%. Both sub-indices remain well above their long run averages. Households’ views of economic conditions over the next 12 months plummeted 11.7%, bringing the index to its lowest level since February. Households’ views of the economic outlook in the next five years fell a more modest 1.7%.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Crisis looms unless leaders grasp economic reforms

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Original article by David Crowe
The Australian – Page: 1 & 4 : 9-Dec-16

The Council of Australian Governments meeting on 9 December 2016 coincides with the release of data showing that GDP growth fell by 0.5 per cent in the September quarter. Australian Institute of Company Directors chair Elizabeth Proust and former Business Council of Australia president Tony Shepherd have urged federal and state leaders to pursue measures aimed at boosting economic growth and investment. Former Victorian premier Jeff Kennett adds that the COAG meeting should focus on economic reform.

CORPORATES
COUNCIL OF AUSTRALIAN GOVERNMENTS, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, NESTLE AUSTRALIA LIMITED, BANK OF MELBOURNE LIMITED, ORIGIN ENERGY LIMITED – ASX ORG, THE AUSTRALIAN INDUSTRY GROUP

Capex still in free fall, but signs of life emerge

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Original article by Paul Garvey
The Australian – Page: 32 : 8-Dec-16

Data from the Australian Bureau of Statistics shows that mining companies reduced their investment in new projects by 10.6 per cent in the September 2016 quarter. The sector’s capital expenditure has fallen for 14 consecutive quarters. However, this may lead to an undersupply of such commodities, which in turn could prompt renewed capex. There are already indications of an upturn in greenfields exploration and IPO activity in the minerals sector.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, ASSOCIATION OF MINING AND EXPLORATION COMPANIES, METALICITY LIMTED – ASX MCT, PANORAMIC RESOURCES LIMITED – ASX PAN, CITIGROUP PTY LTD

Budget turmoil as GDP slumps

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Original article by David Uren
The Australian – Page: 1 & 4 : 8-Dec-16

Treasurer Scott Morrison has attributed the larger-than-forecast downturn in GDP growth in the September 2016 quarter to a sustained decline in business investment over the last three years. The national accounts data shows that GDP growth contracted by 0.5 per cent during the period, while annual growth fell from 3.1 per cent in the June quarter to just 1.8 per cent. Morrison has downplayed the potential for a recession, while Westpac’s Bill Evans argues that a number of one-off factors contributed to the poor economic performance, including the federal election.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, WESTPAC BANKING CORPORATION – ASX WBC, DEUTSCHE BANK AG, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA, S&P GLOBAL RATINGS

Alarm as economic growth stalls

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Original article by David Rogers
The Australian – Page: 19 & 32 : 8-Dec-16

The Australian economy expanded by just 1.8 per cent in the year to September 2016. The Federal Government’s upcoming mid-year Budget update is likely to include a downgraded 2016 economic growth forecast, which was tipped to be 3.25 per cent in the Budget in May. However, Paul Bloxham of HSBC notes that GDP has not fallen for two consecutive quarters since 1991. Nevertheless, the national accounts for the September quarter may strengthen the case for further official interest rate cuts.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, LEHMAN BROTHERS INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG, WESTPAC BANKING CORPORATION – ASX WBC

Party’s over as economy turns mediocre

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 7-Dec-16

Australia’s real GDP growth is expected to have fallen by 0.2 per cent in the September 2016 quarter, with year-on-year growth likely to have slowed to about two per cent. This compares with annual GDP growth of 3.3 per cent in the year to June. Despite the relative strength of the economy and a fall in the jobless rate, Reserve Bank governor Philip Lowe has conceded that growth in employment has slowed and underemployment has risen to a record high, at 9.3 per cent. Meanwhile, the participation rate has fallen to its lowest level in more than a decade.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, KPMG AUSTRALIA PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CORELOGIC AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC