ECONOMIC INDICATORS – AUSTRALIA

Don’t expect pay rises, warn 40pc of CEOs

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Original article by Matthew Cranston, John Kehoe
The Australian Financial Review – Page: 5 : 16-Jul-19

The Executive Connection’s latest survey of CEOs shows that more than 37 per cent expect their employees to receive no pay rise in 2019, or at best an increase of no more than two per cent. A third of respondents expect pay rises of 2-3 per cent, and 14 per cent expect wages to increase by at least four per cent. Meanwhile, 66 per cent have indicated that they are either adopting or considering flexible working conditions to attract and retain top staff, while 30 per cent are seeking to reduce labour costs by investing in automation.

CORPORATES
THE EXECUTIVE CONNECTION PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, WESTPAC BANKING CORPORATION – ASX WBC, McDONALD’S AUSTRALIA LIMITED, UNIVERSITY OF MELBOURNE, AUSTRALIA. FAIR WORK COMMISSION, HUNGRY JACK’S PTY LTD, BIG W DISCOUNT STORES, KMART AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Stubborn workers keep lid on wages

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Original article by Michael Roddan
The Australian – Page: 1 & 4 : 16-Jul-19

Analysis by the Treasury suggests that the reluctance of workers to leave unproductive companies has been a major contributor to Australia’s low wages growth. Treasury’s deputy secretary Meghan Quinn says the research shows that there is a link between the frequency of job switching and higher real wages, including for people who stay in their existing job. The national rate of job-switching is now about eight per cent, compared with 11 per cent in the early 2000s.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, ECONOMIC SOCIETY OF AUSTRALIA, AUSTRALIA. PRODUCTIVITY COMMISSION, RESERVE BANK OF AUSTRALIA

LNG breaks record with $50.5b of exports

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 13 & 18 : 16-Jul-19

Data from EnergyQuest shows that LNG was Australia’s third-biggest source of export revenue in 2018-19, after iron ore and coal. LNG exports totalled 75.1 million tonnes by volume, an increase of 21.2 per cent, and about $50.5bn in terms of value. Shipments from Queensland’s three LNG plants increased from 20.5 million tonnes in 2017-18 to 21.8 million tonnes, although new LNG projects in Western Australia and the Northern Territory were the main driver of the growth in exports. The federal government expects LNG export earnings to peak at $54bn in 2019-20.

CORPORATES
ENERGYQUEST PTY LTD, SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, ROYAL DUTCH SHELL PLC, CHEVRON CORPORATION, GLOBAL ENERGY MONITOR, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY

Inflation sentiment defies Reserve Bank projections

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Original article by Adam Creighton
The Australian – Page: 2 : 12-Jul-19

Roy Morgan’s monthly inflation expectations survey shows that consumers expect inflation of 3.8 per cent for each of the next two years. This compares with the official inflation rate of 1.3 per cent for the year to March, and the Reserve Bank’s inflation target of 2-3 per cent. Julian McCrann of Roy Morgan says the decline in the housing market has been a big driver of lower inflation expectations in 2019.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Housing loan growth at decade low as squeeze hits

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 7 : 12-Jul-19

Data from the Australian Bureau of Statistics shows that housing finance approvals declined by 2.4 per cent in May 2019 and 20.9 per cent in the year to May. Lending to owner occupiers was down 2.7 per cent in May and 18 per cent over the year, while lending to investors fell by 1.7 per cent and 27.8 per cent respectively. However, the monthly figures also show that there was 0.8 per cent growth in housing finance for owner-occupiers who were buying their first home.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS HOLDINGS PTY LTD, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, COUNCIL OF FINANCIAL REGULATORS

Inflation Expectations down to 3.8% in June as RBA cuts rates

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Original article by Roy Morgan
Market Research Update – Page: Online : 11-Jul-19

Australians aged +14 expect inflation of 3.8% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for June 2019. This is down 0.3% on May and down 0.7% on June 2018. Inflation Expectations have decreased around Australia in June, and are down compared to a year ago, led by declines for both employed and unemployed Australians as well as across different occupations and employment categories. Analysis by voting intentions shows that Inflation Expectations for L-NP supporters fell 0.1% to 3.3% in June, while Inflation Expectations for ALP supporters dropped by 0.3% to 3.7%. Inflation Expectations for Greens supporters were unchanged at 3.6%. June Inflation Expectations are based on personally interviewing a nationwide representative sample of 3,984 Australians aged 14+ face-to -face in their own homes.

CORPORATES
ROY MORGAN LIMITED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS

Signs that wage rise pick-up is under way

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Original article by Matthew Cranston, David Marin-Guzman
The Australian Financial Review – Page: 1 & 4 : 10-Jul-19

A number of large Australian companies have struck new enterprise agreements which include pay rises that are higher than the current level of wage growth. Some employers in sectors such as retailing and fast food are seeking to increase wages in line with the latest increase in the minimum wage. Meanwhile, Andrew Hanson of recruitment firm Robert Walters says the outlook for the economy and business conditions during the first half of 2019-20 means that more highly-skilled employees are unlikely to receive a significant pay rise.

CORPORATES
ROBERT WALTERS PTY LTD, McDONALD’S AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HUNGRY JACK’S PTY LTD, BIG W DISCOUNT STORES, KMART AUSTRALIA LIMITED, SUPER RETAIL GROUP LIMITED – ASX SUL, BWS – BEER WINE SPIRITS, AUSTRALIA. FAIR WORK COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UNIVERSITY OF MELBOURNE, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JP MORGAN AUSTRALIA LIMITED

ANZ-Roy Morgan Consumer Confidence consolidates to 117.6

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Original article by Roy Morgan
Market Research Update – Page: Online : 10-Jul-19

ANZ-Roy Morgan Australian Consumer Confidence fell 1.1% to 117.6 in the week ended 7 July, following the prior week’s 4% gain. Households’ views towards current financial conditions rose 3.7%, while views towards future financial conditions gained 1.3%. However, consumers’ views toward current economic conditions fell 3.6% and views toward future economic conditions fell 1.7%. The ‘time to buy a household item’ index was down 4.6%, and the four-week moving average for inflation expectations was up 0.1ppt to 4%.

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

Real unemployment at 9.2% in June as tax cuts set to boost economy

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Original article by Roy Morgan
Market Research Update – Page: Online : 5-Jul-19

The latest data for the Roy Morgan employment series shows that 12,363,000 Australians were employed in June 2019, up 118,000 over the past year. The rise in employment was driven by a significant increase in full-time employment of 479,000 over the last year (to 8,279,000); however, part-time employment has declined by 361,000 (to 4,084,000). The figures also show that 1,254,000 Australians (9.2% of the workforce) were unemployed in June, up 83,000 on a year ago, and the unemployment rate was up by 0.5%. An additional 1,275,000 Australians (9.4% of the workforce) were under-employed, working part-time and looking for more work, a decrease of 27,000 in a year (down 0.3%). In total, 2,529,000 Australians (18.6% of the workforce) were either unemployed or under-employed in June, an increase of 56,000 in a year (up 0.2%). Roy Morgan’s real unemployment figure of 9.2% for June is significantly higher than the current ABS estimate for May 2019 of 5.2%. Roy Morgan CEO Michele Levine says many commentators are expressing concern about the state of the Australian economy; however, with significant income tax cuts being legislated by the new Government and back-to-back interest rate cuts by the RBA in June and July, there is an increasing amount of stimulus in the Australian economy to support businesses and therefore increase employment opportunities.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Trade surplus hasn’t hushed rate cut talk

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Original article by Matthew Cranston
The Australian Financial Review – Page: 7 : 4-Jul-19

Australia’s trade surplus rose to a record $5.7bn in May, eclipsing the previous high of $4.8bn in April. The big trade surplus was driven by strong growth in iron ore export volumes and the price of the steel input. Kaixin Owyong of National Australia Bank says the record trade surplus could put the nation on track to achieve a current account surplus for the first time in decades. Meanwhile, some economists have flagged the potential for another official interest rate cut in August.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS HOLDINGS PTY LTD