ECONOMIC INDICATORS – AUSTRALIA

China turning off the cash tap

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Original article by Glenda Korporaal
The Australian – Page: 1 & 2 : 9-Jun-20

A report produced by KPMG and the University of Sydney shows that Chinese investment in Australia fell to a 12-year in 2019. Chinese investment fell by 60 per cent to $3.4bn in total, including the acquisition of Bellamy’s Australia for $1.5bn. The report also shows that China-based investors made just 42 deals in Australia during 2019, compared with 74 in 2018. The report covers completed deals worth more than $US5m. Doug Ferguson of KPMG says Chinese investment in Australia is likely to continue to fall in 2020.

CORPORATES
KPMG AUSTRALIA PTY LTD

Business Confidence jumps in May, up 13pts to 89.9 – highest in Western Australia & South Australia

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Original article by Roy Morgan
Market Research Update – Page: Online : 9-Jun-20

In May 2020 Roy Morgan Business Confidence was up 13pts (+16.7%) to 89.9 and recovering significantly from the record low reached in April. Michele Levine, CEO of Roy Morgan, says: "For the first time in 2020 a majority of 50.5% of businesses expect the business will be ‘better off’ this time next year. The turnaround has been quickest in SA & WA. However, for the Australian economy to really get moving, the Governments of NSW and Victoria must improve their low Business Confidence by encouraging businesses to invest and seek opportunities for growth in the year ahead."

CORPORATES
ROY MORGAN LIMITED

Worst slump in history decimates retailing

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Original article by Patrick Commins
The Australian – Page: 4 : 5-Jun-20

Data from the Australian Bureau of Statistics shows that retail turnover fell by an unprecedented 17.7 per cent in seasonally adjusted terms during April. Clothing and footwear sales fell by 50 per cent as coronavirus lockdown restrictions took effect, while turnover at cafes and restaurants was down 35 per cent. Food retailers’ sales fell by 17 per cent after being boosted by panic buying in March. Australian Retailers Association CEO Paul Zahra says the worst may not be over for retailers, given that the economy is officially in recession and the unemployment rate is set to rise in coming months.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIAN RETAILERS ASSOCIATION

2.09 million Australians unemployed in May, down 69,000 on April

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Original article by Roy Morgan
Market Research Update – Page: Online : 5-Jun-20

In May 14.8% of the workforce (2.09 million Australians) were unemployed and 9.7% (1.37 million) were under-employed. This is a total of 3.46 million (24.5%) unemployed or under-employed as Australia begins to open up, according to the latest Roy Morgan employment estimates – obviously an under-estimation as 3.5 million are currently subsidised on JobKeeper. Michele Levine, CEO Roy Morgan, says: "Australia has entered its first recession for three decades and a quarter of the Australian workforce is unemployed or under-employed. To emerge from recession quickly businesses and unions must work together to forge sensible and equitable solutions that encourage employers to hire new workers. A Roy Morgan survey this week showed the Federal Court decision to award extra entitlements to certain casual employees will effect up to 794,000 Australian businesses. 567,000 businesses say they will be deterred from hiring casual employees and 123,000 say the decision will ‘force them to close’. This shows if businesses and unions don’t work together hundreds of thousands of Australians will struggle to find new jobs."

CORPORATES
ROY MORGAN LIMITED

Depth of downturn less than expected

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Original article by Adam Creighton
The Australian – Page: 2 : 3-Jun-20

Australia has recorded a trade surplus of $19.2bn for the March quarter, and a current account surplus of $8.4bn. The result was driven by strong growth in export volumes and a fall in imports due to the impact of the pandemic. Meanwhile, the median forecast of economists is for GDP growth to have contracted by 0.4 per cent in the quarter, with official data to be released on 3 June. Reserve Bank governor Philip Lowe has suggested that the coronavirus-induced economic downturn may prove be less severe than initially expected.

CORPORATES
RESERVE BANK OF AUSTRALIA

ANZ-Roy Morgan Consumer Confidence increases for ninth straight week, up 5.6pts to 98.3

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Original article by Roy Morgan
Market Research Update – Page: Online : 3-Jun-20

ANZ-Roy Morgan Australian Consumer Confidence rose 6% to 98.3 in the week to 31 May. The nine-week run is the most extended run of consecutive gains since the index changed to a weekly format in 2008. Now 24% (up 1ppt) of Australians say their families are ‘better off’ financially than this time last year, while 36% (unchanged) say their families are ‘worse off’ financially. Meanwhile, 38% (unchanged) of Australians expect their family to be ‘better off’ financially this time next year, and 17% (also unchanged) expect to be ‘worse off’ financially. However, just 10% (up 4ppts) expect ‘good times’ for the Australian economy over the next 12 months, while 42% (down 6ppts) expect ‘bad times’. In addition, 42% (up 7ppts) of Australians say now is a ‘good time to buy’ major household items, while 34% (down 4ppts) say now is a ‘bad time to buy’. The four-week moving average for ‘inflation expectations’ remained unchanged at 3.3%. The weekly reading decreased to 3.1% from 3.2%.

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

Australia could avoid technical recession fate

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Original article by William McInnes
The Australian Financial Review – Page: 21 : 1-Jun-20

Most economists expect GDP data to be released on 3 June will show that the Australian economy contracted in the March quarter. However, five of the 24 economists polled by Bloomberg believe that Australia recorded positive GDP growth for the period, despite the impact of summer bushfires and the coronavirus pandemic. Phil Odonaghoe of Deutsche Bank expects the economy to avoid a technical recession, although David Plank of the ANZ Bank contends that this is moot given that nearly 20 per cent of Australians are unemployed or underemployed.

CORPORATES
BLOOMBERG LP, DEUTSCHE BANK AG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ-Roy Morgan Consumer Confidence increases for seventh straight week, up 2.0pts to 92.3

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

ANZ-Roy Morgan Australian Consumer Confidence rose 2.2% to 92.3 in the week to 17 May. Now 24% (up 3ppts) of Australians say their families are ‘better off’ financially than this time last year, while 36% (down 4ppts) say their families are ‘worse off’ financially. Meanwhile, 37% (up 1ppt) of Australians expect their family to be ‘better off’ financially this time next year, and 20% (unchanged) expect to be ‘worse off’ financially. However, just 7% (up 1ppt) expect ‘good times’ for the Australian economy over the next 12 months, while 48% (up 2ppts) expect ‘bad times’. In addition, 34% (up 4ppts) of Australians say now is a ‘good time to buy’ major household items, while 40% (up 1ppt) say now is a ‘bad time to buy’. The four-week moving average for ‘inflation expectations’ remained unchanged at 3.4%. The weekly reading decreased to 3.3% from 3.5%.

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

ABS April Unemployment estimate doesn’t reflect reality. ABS claims 594,000 lose their jobs but only 104,000 become unemployed (?!?)

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Original article by Gary Morgan, Michele Levine, Julian McCrann
Market Research Update – Page: Online : 15-May-20

Yesterday the ABS released its April employment estimates. The ABS estimates that 12,419,000 Australians were employed in April, down 594,000 on March. There were sharp falls for both full-time and part-time employed. The ABS estimate Australian unemployment increased by only 104,000 to 823,000 in April (6.2% of the workforce, up 1%). Australians will be asking, how can the ABS say 594,000 have lost their jobs in April but only 104,000 become unemployed? This is because the ABS claim 490,000 people left the workforce in April. i.e. the ABS claims these people lost their jobs and weren’t then looking for work and available to start work during the reference week. These workers are unemployed – NOT out of the workforce. So the workforce size in April should match the March estimate of 66%. The real ABS unemployment estimate for April is closer to 1.35 million (9.8%) – an increase of 4.6% points. Combined with the estimated ABS under-employment of 1.82 million (13.7%) means a combined unemployment and under-employment of 3.16 million (23.5%). This is much closer to the Roy Morgan April employment estimates showing 2.16 million Australians (15.3%) were unemployed and a total of 3.48 million (24.7%) were either unemployed or under-employed.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

‘Massive hit’: unemployment jump set to break ABS records

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 14-May-20

Shane Oliver of AMP Capital expects labour market data to be released on 14 May will show that a record 750,000 jobs were lost in April. AMP Capital forecasts that the unemployment rate rose to 10 per cent in April, while less bearish economists anticipate a jobless rate of between eight and nine per cent. Justin Smirk of Westpac notes that the actual jobless rate is likely to be much higher, as the Australian Bureau of statistics does not consider somebody to be unemployment if they have been laid off but have a job to go back to. Meanwhile, data from the ABS shows that annual growth in wages was just 2.1 per cent in the March quarter.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN BUREAU OF STATISTICS