ECONOMIC INDICATORS – AUSTRALIA

Economic reward in virus suppression

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Original article by Matthew Denholm
The Australian – Page: 4 : 26-Oct-20

CommSec’s latest ‘State of the States’ report shows that Tasmania is Australia’s best performing economy for a third successive quarter. Tasmania is ranked first with regard to a number of indicators, including housing finance and retail trade. Craig James of CommSec says there is a link between a state’s success in suppressing COVID-19 and its economic performance. Tasmania has had no recorded cases since August, and the release of the CommSec report coincides with Tasmania’s borders being re-opened to all other states except Victoria and New South Wales.

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COMMONWEALTH SERVICES LIMITED

Unemployment hits 6.9pc as 30,000 jobs go

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 16-Oct-20

The locked-down Victorian economy shed 36,000 jobs in September, although the state’s unemployment rate is estimated to have fallen by 0.5 percentage points due to a decline in the participation rate. The national unemployment rate increased from 6.8 per cent to 6.9 per cent in September, according to the Australian Bureau of Statistics’ latest estimate. The ABS jobs data does not include people who have given up looking for work. UBS economist George Tharenou suggests that the nation’s real unemployment rate is likely to be around 10 per cent at present.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, UBS HOLDINGS PTY LTD

ANZ-Roy Morgan Consumer Confidence up 1.1pts to 93.5 as new cases of COVID-19 continue decline and restrictions ease in Country Victoria

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Sep-20

ANZ-Roy Morgan Consumer Confidence rose 1.1pts to 93.5 on the weekend of September 19/20. It is now 16.6pts lower than a year ago (110.1) and just 0.2pts below the 2020 weekly average of 93.7. Consumer Confidence has now increased for three straight weeks and is up 3.3pts since hitting a low of 90.2 in late August. Now 23% (down 2ppts) of Australians say their families are ‘better off’ financially than this time last year, while 35% (up 1ppt) say their families are ‘worse off’ financially. In addition, 34% (unchanged) of Australians expect their family to be ‘better off’ financially this time next year, and 19% (down 1ppt) expect to be ‘worse off’ financially. Only 7% (up 1ppt) expect ‘good times’ for the Australian economy over the next 12 months, while 43% (down 4ppts) expect ‘bad times’. Meanwhile, 35% (down 2ppts) of Australians say now is a ‘good time to buy’ major household items, while 35% (unchanged) say now is a ‘bad time to buy’.

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

ABS August unemployment estimate ignores the 232,000 Australians who have left the workforce since March, 2020

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Original article by Michele Levine, Gary Morgan, Julian McCrann
Market Research Update – Page: Online : 18-Sep-20

The ABS unemployment estimate for August 2020 claims 922,000 Australians were unemployed (6.8% of the workforce), a surprise drop of 0.7% points on July 2020. However, the ABS claims 232,000 Australians have left the workforce since March – meaning the participation rate dropped from 66% to 64.8% in August. If the ABS participation rate was steady at 66% there would now be 1.18 million unemployed. In addition, within the ABS employment release is a section indicating 151,800 Australians the ABS counts as employed were working zero hours in August and had ‘no work, not enough work available, or were stood down’. If these non-workers are added the adjusted ABS unemployment estimate is 1.33 million – an unemployment rate of 9.7%. Combined with the ABS under-employment estimate of 1.52 million that would be 2.85 million Australians unemployed or under-employed in August – 20.7% of the Australian workforce. This ‘adjusted’ ABS estimate is close to Roy Morgan’s unemployment & under-employment estimate of 22.8% for August released two weeks ago.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Roy Morgan Business Confidence down 1.2pts to 83.1 in August – Confidence lowest in Victoria (76.1) and Queensland (77.0)

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Original article by Roy Morgan
Market Research Update – Page: Online : 8-Sep-20

In August 2020 Roy Morgan Business Confidence was down 1.2pts (-1.4%) to 83.1. Public Administration & Defence and Transport, Postal & Warehousing are the only industries with Business Confidence in positive territory above 100 over the last two months – Public Administration & Defence (123.4) and Transport, Postal & Warehousing (114.4). Industries with above average confidence included Property & Business Services (92.2), Education & Training (91.6), Wholesale (89.4), Agriculture (88.9), Manufacturing (87.1) and Construction (86.0). Industries with confidence below average included Community Services (73.8), Recreation & Personal (68.0), Retail (63.5), Mining (62.8) and Finance & Insurance (57.5).

CORPORATES
ROY MORGAN LIMITED

Australian exports to China fall 26pc, fastest drop among trade partners

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Original article by Glenda Korporaal
The Australian – Page: 20 : 8-Sep-20

Data from China’s General Administration of Customs suggests that the value of the nation’s imports of goods from Australia fell by 26.2 per cent year-on-year in August, to $US8.81bn. This follows a 7.2 per cent fall in July. Australia’s overall exports to China have fallen by 7.5 per cent to $US75.7bn over the year, according to the Chinese data. The Australian Bureau of Statistics has previously reported that the nation exported a record $150bn worth of goods to China in the year to 30 June. Australia’s relations with China have become increasingly strained in recent months.

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CHINA. GENERAL ADMINISTRATION OF CUSTOMS, AUSTRALIAN BUREAU OF STATISTICS

Stimulus sparks 15pc surge in company profits

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Original article by Patrick Commins
The Australian – Page: 4 : 1-Sep-20

Government stimulus measures such as the JobKeeper wage subsidy scheme contributed to a sharp rise in gross operating profits in the corporate sector during the June quarter. Seasonally adjusted figures from the Australian Bureau of Statistics show that operating profits rose by 15 per cent overall. However, sectors whose sales have been hardest hit by the coronavirus pandemic recorded much bigger growth in profits; these include hospitality (86 per cent higher than the March quarter), arts and recreation (up 84 per cent) and retailing (up 31 per cent). Economists had expected a six per cent fall in profits.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

China devours one-third of all our farm exports

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Original article by Patrick Commins
The Australian – Page: 5 : 20-Aug-20

Data from Rabobank shows that China accounted for 32 per cent of Australia’s food and agricultural exports in 2019-20. China also bought 30 per cent of Australia’s lamb exports and 25 per cent the nation’s beef exports during the financial year, while it accounted for 77 per cent of wool shipments. Tim Hunt of Rabobank warns that Australia is too reliant on a single export market, particularly given the recent tensions between the two nations. He notes that while China has been the major driver of the agribusiness sector’s growth over the last decade, there is a need to diversify into other export markets.

CORPORATES
RABOBANK AUSTRALIA LIMITED

Inflation Expectations rebound in July to 3.4% as COVID-19 returns

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Original article by Roy Morgan
Market Research Update – Page: Online : 10-Aug-20

In July, Australians expected inflation of 3.4% annually over the next two years, up 0.2% points on the record low in June. Inflation Expectations are down 0.7% points on a year ago. For much of Australia the month of July began with hope that the COVID-19 pandemic was successfully being dealt with, but as the month progressed the virus re-emerged. This was particularly evident in Melbourne which progressively introduced new restrictions throughout the month. Sydney also experienced renewed outbreaks during the month, with restrictions being re-imposed to limit gathering sizes at certain venues. With this in mind the increase in Inflation Expectations in July were driven by increases in Australia’s largest cities of Sydney (up 0.1% to 3.4%), Melbourne (up 0.6% to 3.4%) and Brisbane (up 0.1% to 3.5%). Inflation Expectations are split significantly on gender lines, with women expecting annual inflation of 4% over the next two years while men expect inflation of only 2.8%. Roy Morgan CEO Michele Levine says the rebound in Inflation Expectations in July follows three successive declines from April to June, and is the largest monthly increase in the measure so far in 2020.

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ROY MORGAN LIMITED

Taste of deflation as CPI plunges

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Original article by Sarah Turner
The Australian Financial Review – Page: 6 : 27-Jul-20

The economic impact of COVID-19 will be reflected in the consumer price index data for the June quarter, which will be released on 29 July. The consensus forecast is for a two per cent fall in the quarter and an 0.5 per cent decline in the year to June. However. Westpac economists expect the CPI to have declined by 2.4 per cent for the quarter and 0.9 per cent over the year. The coronavirus lockdown reduced demand for a range of goods and services in the three months to June, including petrol and travel.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC