ECONOMIC INDICATORS – AUSTRALIA

Good news and bad debt

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Original article by Terry McCrann
Sunday Herald Sun – Page: 63 : 3-May-20

The advice from Australian Banking Association CEO Anna Bligh that "so far" more than 320,000 home loan borrowers and 170,000 businesses have had loan repayments deferred is a mix of ‘good’ news and ‘bad’ news. Clearly the numbers who need repayments deferred "will increase". Some "good news" for the government is Roy Morgan’s April estimate of Australia’s unemployed and under-employed, down 439,000 on the last 2 weeks in March – however, it only dropped because of the government’s JobKeeper scheme. If JobKeeper numbers were added to those who are unemployed and under-employed then "real joblessness" is probably around a third of the workforce, with not one person from the public sector ‘out-of-work’. Even with Australian banks proactively playing their part the post-virus reality is not going to be "a walk in the park" – assuming it is allowed!

CORPORATES
AUSTRALIAN BANKING ASSOCIATION, ROY MORGAN LIMITED

Aussie workers among highest taxed in OECD

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Original article by Tom McIlroy
The Australian Financial Review – Page: 10 : 1-May-20

New figures show that workers in OECD member nations had an average income tax rate of 15.8 per cent in 2019. However, Australian workers on the average wage paid an income tax rate of 23.6 per cent. Denmark, Iceland and Belgium were the only OECD nations that had a higher average income tax rate. Grant Wardell-Johnson of KPMG notes that personal income tax accounts for nearly half of Australia’s tax base.

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, KPMG AUSTRALIA PTY LTD

Government payments outweigh wage slump

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 29-Apr-20

New figures from the Commonwealth Bank of Australia highlight the impact of the coronavirus on the labour market. Its analysis shows that there has been a 50 per cent increase in the number of CBA bank accounts that are receiving JobSeeker payments. Senior economist Gareth Aird says the increase in government benefits that have been paid since the onset of the pandemic has been greater than the fall in wages and salaries paid into CBA accounts to date. Meanwhile, CBA expects the savings rate to rise significantly in the June quarter.

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COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

ANZ-Roy Morgan Consumer Confidence increases for fourth straight week, up 0.8pts to 85.0

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Original article by Roy Morgan
Market Research Update – Page: Online : 29-Apr-20

ANZ-Roy Morgan Australian Consumer Confidence rose 1% to 85.0 in the week to 26 April, although the gain was much smaller than over the prior three weeks. Now 19% (down 1ppt) of Australians say their families are ‘better off’ financially than this time last year, while 40% (down 1ppt) say their families are ‘worse off’ financially. Meanwhile, 30% (down 6ppts) of Australians expect their family to be ‘better off’ financially this time next year, and 22% (down 2ppts) expect to be ‘worse off’ financially. However, just 6% (up 1ppt) expect ‘good times’ for the Australian economy over the next 12 months, while 48% (down 6ppts) expect ‘bad times’. In addition, 25% (down 3ppts) of Australians say now is a ‘good time to buy’ major household items, while 38% (down 9ppts) say now is a ‘bad time to buy’. The four-week moving average for ‘inflation expectations’ fell 0.1ppt to 3.7%. The weekly reading bumped to 3.6% from 3.1%.

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

Inflation to rise ahead of plunge

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Original article by Matthew Cranston
The Australian Financial Review – Page: 6 : 28-Apr-20

The travel and accommodation sector is likely to be among the hardest hit when inflation data for the March quarter is released on 29 April. The inflation figures will reflect the impact of the bushfires and the early stages of the coronavirus crisis. The market consensus is for a headline inflation rate of 1.9 per cent for the year to March, while the Commonwealth Bank has forecast that inflation will reach two per cent for the first time since mid-2018. However, economists generally expect a negative inflation rate in the June quarter, a view shared by Reserve Bank governor Philip Lowe.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA

Panic buying could put GDP in positive territory for March

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Original article by Matthew Cranston, Simon Evans
The Australian Financial Review – Page: 7 : 23-Apr-20

Data from the Australian Bureau of Statistics shows that retail turnover increased by 8.2 per cent in March, driven by panic buying in response to the coronavirus. Sales of canned food, medicinal products and cleaning goods were particularly strong in March, with turnover rising by 50 per cent month-on-month. Josh Williamson of Citigroup warns that retail turnover is likely to fall sharply in April, due to the impact of lockdowns and social distancing rules. David Plank of the ANZ Bank says the sales boost in March could potentially result positive GDP growth for the first quarter of 2020.

CORPORATES
AUSTRALIAN BUREAU OF AGRICULTURAL AND RESOURCE ECONOMICS AND SCIENCES, CITIGROUP PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Inflation expectations down significantly in mid-April

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Apr-20

In mid-April there was a jolt to Australian Inflation Expectations, with a steep fall in the weekly index on April 18/19 to a record low of only 3.1%, down from 3.8% the week before and significantly below the 2020 weekly average of 4%. The weekly fall was caused by fewer Australians expecting prices to increase over the next two years, down to 69.4% (down 1.4% on a week ago) and more expecting prices to either decrease (up 1% to 10.8%) or ‘Stay the same’ (up 0.4% to 19.8%). Roy Morgan CEO Michele Levine says the steep drop in Inflation Expectations in mid-April comes as the impact of the COVID-19 pandemic begins to hit key pricing metrics in the economy.

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ROY MORGAN LIMITED

ANZ-Roy Morgan Consumer Confidence increases to 84.2

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Apr-20

ANZ-Roy Morgan Australian Consumer Confidence rose 7.7% to 84.2 in the week to 19 April. Now 20% (down 1ppt) of Australians say their families are ‘better off’ financially than this time last year, while 41% (up 1ppt) say their families are ‘worse off’ financially. Meanwhile, 36% (up 4ppts) of Australians expect their family to be ‘better off’ financially this time next year, and 24% (down 3ppts) expect to be ‘worse off’ financially. However, just 5% (unchanged) expect ‘good times’ for the Australian economy over the next 12 months, while 54% (down 4ppts) expect ‘bad times’. In addition, 28% (up 8ppts) of Australians say now is a ‘good time to buy’ major household items, while 47% (down 7ppts) say now is a ‘bad time to buy’. The four-week moving average for ‘inflation expectations’ fell 0.2ppt to 3.8%. The weekly reading dipped to 3.1% from 3.8%.

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

ABS March unemployment figures are misleading – because second half of March ignored!

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Original article by Gary Morgan, Michele Levine, Julian McCrann
Market Research Update – Page: Online : 17-Apr-20

The ABS yesterday, finally, released their March unemployment estimates – actually the first half of March. The ABS March employment estimates show employment increasing by 6,000 and unemployment virtually unchanged at 5.2%, up only 0.1% from February – both very misleading and should never have been released in their current form. On April 8, 2020 Roy Morgan released accurate real employment and unemployment estimates for the whole of March – pre and post COVID-19 lock-down. Roy Morgan’s unemployment estimate pre the COVID-19 lock-down was 7.3%, essentially unchanged on February. However, Roy Morgan’s late March unemployment estimates showed the Government’s COVID-19 lockdown response resulted in an extra 1.4 million Australians becoming unemployed in a matter of two weeks, leading to unemployment of 2.4 million (16.8%) and under-employment increasing 374,000 to 1.52 million (10.6%) in the second half of March. This means a record high 3.92 million (27.4%) of Australians were either unemployed or under-employed and looking for more work in the second half of March – depression numbers! (Following is a link to full details on Roy Morgan’s March employment and under-employment estimates: http://www.roymorgan.com/findings/8363-roy-morgan-unemployment-and-under-employment-march-2020-202004080900)

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

ANZ-Roy Morgan Consumer Confidence continues recovery – up 9% to 78.2

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Original article by Roy Morgan
Market Research Update – Page: Online : 16-Jan-20

The weekly ANZ-Roy Morgan Consumer Confidence Rating was up 9% to 78.2 on the Easter weekend, and now up 20% since a record low of 65.3 two weeks ago. Driving the increase are more Australians saying they expect to be ‘better off financially’ this time next year – up 7% to 32%, while 27% (down 1%) say they expect to be ‘worse off’. This is the only index question in positive territory, however compared with the previous week there were improvements across the other four Consumer Confidence questions. The two weeks of increases follow the Federal Government’s announcement of a $130 billion wage subsidy in late March and shows how important it is to measure sentiment in the Australian economy on a real-time weekly basis rather than over the longer monthly time period.

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