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2.Economic forecasts

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18 Aug 2017 (AFR) – Prominent China debt bear warns of $6.8trn in hidden losses

(18 August 2017, AFR, p29, by Gabriel Wildau) ‘One of the most influential analysts of China’s financial system believes that bad debt is $US6.8trn above official figures and warns that the government’s ability to enforce stability has allowed underlying problems to go unchecked. Charlene Chu built her reputation as China banking analyst at credit rating … Continue reading

17 Aug 2017 (AFR) – Fund managers say equities are too expensive as profit hopes take ‘ominous turn’

(17 August 2017, AFR, p26, by Jessica Sier) ‘Despite encouraging signs the global economy is picking up, two surveys of fund managers indicate that caution is the prevailing sentiment in the industry, with a record number of professional investors saying equities are overvalued. Of the 174 fund managers surveyed by Bank of America Merrill Lynch, … Continue reading

17 Aug 2017 (AFR) – When missed guidance is a buying opportunity – This is when close enough should be good enough for investors

(17 August 2017, AFR, p25,by Philip Baker) ‘Investors these days can be a hard lot to please and it’s not hard to work out why. But is it right? CSL and Seek are two companies that on Wednesday paid severely for not quite meeting analyst forecasts. Despite good profit results from both companies, investors took an … Continue reading

17 Aug 2017 (TheAge) – Dexus says office markets entering a “golden period”

(17 August 2017, The Age, BusinessDay, p23, Carolyn Cummins) ‘Dexus Property has made the call that the Sydney and Melbourne office markets are entering a golden period of high demand, low vacancy and few new developments, for at least another three years. This will lead to net rental growth, where incentives in contracts will be … Continue reading

16 Aug 2017 (TheAge) – RBA warns construction activity could start to decline

(16 August 2017, The Age, BusinessDay, p21, Eryk Bagshaw) ‘The Reserve Bank has warned construction activity could begin to decline as the number of residential building approvals falls from its peak in 2016.  The message, released in the minutes of the central bank’s August meeting on Tuesday, comes a week after BIS Oxford Economics forecast a 31 … Continue reading

28 July 2017 (TheAge) – ANZ says power bill shock to drag retail sector lower – Power bill shock to hit cash registers

(28 July 2017, The Age, BusinessDay, p16, AAP) ‘Soaring electricity prices are becoming a drag for Australia’s weakened retail sector, with the latest round of increases likely to further crimp consumer spending, an ANZ report says. The sharp increase in energy prices from July 1 will lead to the average Australian household facing a 10 … Continue reading

25 July 2017 (TheAge) – IMF sees US fading as growth engine as China picks up slack

(25 July 2017, The Age, BusinessDay, p23, Bloomberg) ‘The world is leaning less on its biggest economy to sustain the global recovery, according to the International Monetary Fund. The fund left its forecast for global growth unchanged in the latest quarterly update to its World Economic Outlook, released in Kuala Lumpur on Monday.’ Read more … Continue reading

22 July 2017 (AFR) – NSW to undergo biggest decline in apartment construction, Master Builders says

(22 July 2017, AFR, p3, by Michael Bleby) ‘Apartment construction in NSW will fall by almost 40 per cent over the next four years as banks rein in lending and restrictions rise on foreign property investment, new figures from the country’s largest building industry group show. The fall in housing starts of units, townhouses and … Continue reading

21 July 2017 (TheAge) – Earnings expansion spreads to all Australian sectors: Credit Suisse (‘Expect more bull’ in equities as global profits are inflated)

(21 July 2017, The Age, BusinessDay, p25, Jessica Sier) ‘The pick-up in inflation across developed economies has led to a boost in global profits, giving investors cause to cheer the third and final phase of the Australian equity earnings expansion, says Credit Suisse.  Initially sparked by a recovery in commodity prices that have boosted resources stocks, … Continue reading

17 July 2017 (AFR) – Deloitte says rates won’t rise until 2018 amid ‘powder keg’ property market

(17 July 2017, AFR, p3, by Joanna Mather) ‘Interest rates won’t rise until 2018 and even then increases will be slow and moderate because the Reserve Bank of Australia fears igniting the housing “powder keg”, Deloitte Access Economics says. The firm’s latest business outlook acknowledges global momentum to lift rates but insists it will be … Continue reading

17 July 2017 (TheAge) – House price growth to slow further but no crash: UBS

(17 July 2017, The Age, BusinessDay, p21, Clancy Yeates) ‘Economists at investment bank UBS are increasingly confident a “correction” is taking place in residential construction, led by a slowdown in the apartment sector. But they argue house prices are set to grow more slowly, rather than drop, due to very low interest rates and growth … Continue reading

21 June 2017 (AFR) – Morgan Stanley sees ASX200 falling 10pc: how to trade an economic downturn

(21 June 2017, AFR, p31, by Myriam Robin) ‘The S&P/ASX200 will shed 10 per cent of its value over the next year, according to Morgan Stanley. But a falling market needn’t spell disaster. Morgan Stanley has one of the most bearish views of the Australian sharemarket, having significantly downgraded its 12-month index forecast earlier this month … Continue reading

15 June 2017 (AFR) – Commodity prices likely to be softer, due to China

(15 June 2017, AFR, p40, by Alexandra Cain) ‘Mining commodity prices are expected to decline over the next 12 months, largely as a result of slowing demand from China. But supply dynamics in markets such as iron ore and oil will also play a role in moving prices. “Our negative outlook is driven by end-user … Continue reading

14 June 2017 (AFR) – NAB survey shows business conditions best since pre-GFC

(14 June 2017, AFR, p6, by Jacob Greber) ‘An influential survey – watched closely by the Reserve Bank of Australia – which showed businesses have just enjoyed the best month since the 2008 global financial crisis may be giving a more accurate reading of how the economy is doing than last week’s weather-blighted GDP report. … Continue reading

7 June 2017 (AFR) – House price growth to slow to 1.9pc as credit tightens: ANZ

(7 June 2017, AFR, p4, by Michael Bleby) ‘Housing price growth peaked earlier this year and will slow to a pedestrian 1.9 per cent by next year as lending constraints tighten and other measures such as taxes on vacant properties take hold, ANZ says in a new research report. Population increase and demand for housing … Continue reading

3 June 2017 (AFR) – Europe strengthens its hand – for the time being – Six months on and Europe has a spring in its step

(3 June 2017, AFR, p21, by Andrew Clark) ‘Six months ago Europe was on the ropes. France and Holland were under siege from the nativist right, the euro was ailing, panic was spreading about a refugee influx, Britain voted to Brexit, and an assertive Donald Trump was elected US President. Just six months later France … Continue reading

2 June 2017 (AFR) – May factory data point to big China slowdown

(2 June 2017, AFR, p14, by Angus Grigg) ‘China’s efforts to reduce high debt levels across the economy have begun to affect growth, with a key gauge of manufacturing activity falling for the first time in almost a year during May. The Caixin General Manufacturing PMI, released on Thursday, dropped by 0.7 points to 49.6 … Continue reading

2 June 2017 (AFR) – Capex rises for the 1st time in 5 quarters, retail sales surge 1pc

(2 June 2017, AFR, p4, by Jacob Greber) ‘A four-year slide in investment by companies shows nascent signs of bottoming out as firms boosted spending for the first time in five quarters and upgraded their outlook for the coming financial year. While the shift is unlikely to deliver any significant uptick in overall economic growth – … Continue reading

2 June 2017 (TheAge) – Treasurer Scott Morrison sounds warning over economic growth as GDP forecasts turn negative

(2 June 2017, The Age, page 1, James Massola, Peter Martin) ”Treasurer Scott Morrison has begun preparing the ground for weak or negative economic growth as the National Australia Bank marks down its forecasts, predicting a contraction of 0.1 per cent in the March quarter, making it the second quarter in three the economy has … Continue reading

30 May 2017 (TheAge) – No rose-coloured glasses: Treasury secretary John Fraser says this time things really are picking up

(30 May 2017, The Age, p5, Peter Martin) ‘Treasury secretary John Fraser has defended his budget forecast for economic growth, saying there are indications “the long period of growth undershooting forecasts is beginning to come to an end”. In the past three budgets the Treasury has forecast a lift in economic growth of 3 per … Continue reading

29 May 2017 (AFR) – Not a great start to the year – Investment signs point to slowdown

(29 May 2017, AFR, p30, by Philip Baker) ‘There’s a good chance the Australian sharemarket is telling us something about the economy. And it’s not good. Earlier this month, shares were threatening to break the key 6000 level, but since then have ricocheted back hard away from that number. It’s almost as if shares are … Continue reading

27 May 2017 (AFR) – Economy hit by spending strike, cyclone

(27 May 2017, AFR, p1, by: Simon Evans, Carrie LaFrenz, Jacob Greber, Myriam Robin) ‘Australia’s economy looks to have experienced its weakest start to a year since 2011 – narrowly skirting a contraction – as a growing consumer spending strike and a cyclone-driven slowdown in exports weighs on activity just as the government bets its … Continue reading

24 May 2017 (AFR) – Slump coming for housing construction in Sydney, Melbourne

(24 May 2017, AFR, p37, by Nick Lenaghan) ‘Housing construction in Sydney and Melbourne is headed for a major slump, hit by apartment oversupply and credit tightening, according to industry analysts Macromonitor. The downturn is already underway at a national level, with Macromonitor forecasting a total decline in dwelling starts of 23 per cent from … Continue reading

18 May 2017 (TheAge) – Turnbull government hit with triple blow of bad economic news

(18 May 2017, The Age, p4, Eryk Bagshaw, James Massola) ‘In a triple blow to the Turnbull government, a global ratings agency has cast doubt on the promised return to surplus, consumer confidence has fallen and wage growth has stalled at an all-time low.’ <snipped…> ‘On Wednesday, ratings agency Standard and Poor’s confirmed Australia’s AAA … Continue reading

10 May 2017 (AFR) – Retail ‘verges on recession’ – Weaker retail sales point to household stress

(10 May 2017, AFR, p1,  by: Mark Mulligan, Sue Mitchell ) ‘Economists fear the $300 billion retail sector may be on the verge of recession after sales dipped again in March, confirming feedback from retailers that consumers have cut spending as living costs rise. Retail sales slipped 0.1 per cent in March, falling well short of … Continue reading

4 May 2017 (AFR) – Citi sees house prices falling as much as 7pc as housing boom unwinds

(4 May 2017, AFR, p41, by Nick Lenaghan) ‘House prices could fall as much as 7 per cent by 2018 as lending curbs bite and household debt is lowered, according to Citi. Hardest hit potentially would be apartments in inner-city Brisbane and Melbourne, which are more threatened by oversupply than other housing sectors. The forecast … Continue reading

4 May 2017 (AFR) – Double whammy: Engineering, housing construction slumps to coincide, ACIF says

(4 May 2017, AFR, p37, by Michael Bleby) ‘Australia’s construction industry is likely to shed 166,000 jobs over the next three years as a worse-than-expected deterioration in engineering construction coincides with a slump in residential construction, the latest forecasts from the peak Australian Construction Industry Forum body show.’ Read more at AFR.com (might need AFR … Continue reading

11 Apr 2017 (AFR) – Soft landing for Sydney, Melbourne – House prices to plateau by 2020: CoreLogic

(11 April 2017, AFR, p3, by Su-Lin Tan) ‘Sydney and Melbourne house prices will fall marginally between 2018 and 2020 before stagnating, while Perth’s housing market will recover from 2017, the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast forecasts. The new econometric forecast which started in 2016 and projects home values across the country over … Continue reading

3 Apr 2017 (AFR) – Hong Kong Monetary Authority warns on home loan risks as prices soar

(3 April 2017, AFR, p11, by Sandra Tsui) ‘The Hong Kong Monetary Authority has warned banks in the city over the rising risks of property lending. The warning, reported in the Oriental Daily, comes just as home prices notch up another record in Hong Kong, the world’s most expensive housing market, and Citigroup forecasts an … Continue reading

8 Feb 2017 (AFR) – Economists deeply divided over Australia’s economic path in 2017

[COMMENT: Okay, so who will be right with this crystal-ball gazing?] (8 February 2017, AFR, p6, by Jens Meyer) ‘At the start of the year economists seem more divided than ever over Australia’s growth outlook. Will 2017 be a year of economic stagnation warranting more Reserve Bank of Australia rate cuts or will growth pick … Continue reading