The Economic Outlook

[tayser]

buy the dips, sell the peaks.

[Swan]

Originally Posted by Trunter

The Aussie dollar just got completely and utterly bashed. It lost 14 entire Yen in a day or two.. 87 Yen down to 73, and 10 US cents.. 0.92 down to 0.82. :S:S Luckily I'm not travelling anywhere at this point!

good.

finally people will realise that the aussie was way overvalued due to the huge carry trade by foreign investors which is finally been unwound rather than because of australia economic blah blah blah.

i see a target of mid to low 70's for the Aussie (i.e. true value of the Aussie due its economic fundamentals - the rest was fluff caused by the carry trade).

[tayser]

Originally Posted by Swan

good.

finally people will realise that the aussie was way overvalued due to the huge carry trade by foreign investors which is finally been unwound rather than because of australia economic blah blah blah.

Finally unwound? lol - if it was a try unwinding / dumping of AUD like it was in 2008, we'd be in the 60s right now.

Originally Posted by Swan

i see a target of mid to low 70's for the Aussie (i.e. true value of the Aussie due its economic fundamentals - the rest was fluff caused by the carry trade).

How do you arrive at your conclusion based on true value?

[Swan]

Originally Posted by tayser

Finally unwound? lol - if it was a try unwinding / dumping of AUD like it was in 2008, we'd be in the 60s right now.



How do you arrive at your conclusion based on true value?

yeah sorry dude - i meant it is the start of the unwounding (i.e. been should have read being).

long term average for the kangaroo is 65-75c, so given the economy is doing better than most enconomies and our low debt figure, i would expect it to trade at the higher end of this range.

[Danubis]

Don't know which thread to put this in... interesting argument. one i've quietly thought over the past few years. i think it's just from seeing the massive change in brisbane over the past decade.

http://www.theaustralian.com.au/news...-1225873225058

Growth rates expose underperforming states
Richard Blandy From: The Australian May 31, 2010 12:00AM

THERE were great differences between the states and territories in the growth rates of their economies from 1990-2009. Their annual growth rates were (from fastest to slowest): Queensland (4.5 per cent); Western Australia (4.2 per cent); Northern Territory (3.6 per cent); ACT (3.2 per cent); Victoria (3.1 per cent ); Tasmania (2.6 per cent ); NSW (2.5 per cent) and South Australia (2.4 per cent).

Can differences in economic structure - a big mining sector, for example - explain these differences? Or were these growth differences broadly spread across sectors? In short, did state governments' economic policies matter?

To answer this question we drew on the state accounts of the Australian national accounts for the past 20 years and divided the Australian, state and territory economies into industry sectors, concentrating on those showing significant change at the national level (or important for other reasons, public administration and safety, for example).

These industry sectors are: agriculture, forestry and fishing, mining, manufacturing, financial and insurance services, professional, scientific and technical services, and public administration and safety.



It would appear that national industry sector performance can explain some of the differences between the states and territories in their economic growth performance but by no means all of those differences. Other factors also played an important role.

In fast-growing WA and the NT, and in ACT which is growing at the Australian average, the situation is clear. Their economic fortunes have been heavily influenced by their industry structure.

Mining contributed 8.4 per cent of the increase in Australia's gross domestic product from 1990-2009, but in WA it contributed 27.3 per cent of the increase in WA's gross state product, while in the NT mining contributed 31.3 per cent of the increase in GSP.

Public administration contributed 4.8 per cent of the increase in Australia's GDP from 1990-2009, but in the ACT it contributed 35.7 per cent of the increase in the ACT's GSP.

But in Queensland, Australia's fastest-growing state, the situation has been quite different. Queensland's fast economic growth was spread across every industry sector except agriculture. In every sector except agriculture, Queensland's growth rate exceeded the national growth rate. Queensland's economic growth is not just a mining story. It is broad based. It is plausible that Queensland's fast population growth rate has had a strong effect on the structure as well as the pace of its economic growth.

Going to the other end of the state and territory economic growth league, in every sector except agriculture, SA's growth rate has been less than the national growth rate.

In every sector except agriculture, financial services and public administration, Tasmania's growth rate has been less than the national growth rate.

In many respects, these states' growth stories are the obverse of Queensland's: broad-based weakness relative to the national picture.

Even in areas of past strength such as manufacturing their growth performance (especially in SA) has been weaker than at the national level.

Similarly, slow growing NSW is characterised by slow rates of growth in every industry sector during the past 20 years, compared with the national growth rates of each of those sectors.

By contrast, in Victoria, three industry sectors growth rates - agriculture, financial services and professional services - exceeded their corresponding national growth rates. Indeed the growth rate of agriculture in Victoria was the fastest among all the states and territories.

In many respects, NSW's and Victoria's growth stories confirm an emerging theme of growth patterns among states and territories (WA, NT and the ACT apart): strongly growing states show strength across many sectors, while weakly growing states show weakness across many sectors.

WA, NT and the ACT apart, differences in economic performance among the states are not driven mostly by differences in their industry sector composition, but by broader influences that have enabled some states to grow faster than others. It is tempting to believe that those broader influences have been state governments' economic policies.

On this reading, Queensland, Victoria and, probably, WA have enjoyed the best state government economic policies, while NSW, Tasmania and SA have enjoyed the least favourable policies for economic growth.

Richard Blandy is an adjunct professor in the School of Management, University of South Australia. This is an edited version of an article in In Business South Australia.

[MyFavco]

The chart below has the Sovergien Debt positions forecasted for 2015. This is a very important figure as this is when most OECD countries should be well in to their next growth phase.

The debt held in 2015 will be drag on their economies. They will be F%^ked if they can not reduce it before the next recession appears.

BTW, 2015 Forecast for; Greece is 170%, Ireland 120%, Portugal 116%, Spain 96%.
Source

This from the Fin Review:

image hosted on flickr

[MyFavco]

Here is a little study I did on the domestic housing market in Queensland which I would like to share.....

The rationale is that periods of Housing Booms are defined as being when the number (trend) of monthly approvals exceeds the 12 month average. The data is from ABS 8731 (the data for April is due out tomorrow).

At times of Housing Activity Booms the following things are happening:

1. Speculators enter the market for a quick turn around profit.
2. Construction prices increase due to increased demand of trades people.
3. Vacant Land prices increase due to increase Builder activitiy and rate of sale for new dwellings.
4. New house prices increase due to a general lift in optisim and influx of new entrants/ upgraders.
5. The larger housing market (resales) will mirror this activity somewhat as existing home owners sell thier current home and switch in to newly built product.

The graph suggests to me that the current housing boom has a long way to run yet and it is a perfectly safe time to get in to a housing project.

image hosted on flickr

[hakz2007]

Australia's company profits grow fastest in 18 months

CANBERRA, May 31 (PNA/Xinhua) -- Corporate Australia raked in its biggest profits in a year, 57.2 billion dollars (48.5 billion U.S. dollars), during the first three months of 2010, new data released on Monday showed.

The gross operating profits of companies rose by seasonally- adjusted 3.9 percent in the March quarter, the fastest pace in 18 months, the Australian Bureau of Statistics said.

Business inventories, such as stock on shelves and in warehouses, rose 0.5 percent in the March quarter, as forecast by market economists.

The data feeds into Wednesday's national accounts for the first three months of the year.

The balance of payments for the March quarter also showed the current account deficit narrowed to 16.55 billion dollars (14 billion U.S. dollars) after a revised 18.47 billion dollars (15.7 billion U.S. dollars) shortfall in the December quarter.

Economists' forecasts had centered on a deficit of 16.25 billion dollars (13.8 billion U.S. dollars) in the March quarter.

Still, despite the improvement in the deficit, the bureau expected exports will subtract 0.5 percentage points from gross domestic product (GDP).

Prior to Monday's data, economists' forecasts for March GDP had centered on a 0.7 percent rise in the quarter, a slightly slower pace than the 0.9 percent growth recorded in the final three months of 2009.

This would take the annual rate to 2.6 percent from 2.7 percent previously.

http://www.pna.gov.ph/index.php?idn=...d=3&rid=278756

[cowface]

The Lowy Institute's poll on foreign policy asked:

Today, which one of the following do you think is the world’s leading economic power?




In Reality (GDP, PPP)





Average Chinese standard of living:




God, we're fucking ignorant.

Via Pollytics

[LanceDriver]

^ but that's what the medias been learning us lately!

[Skyrazer]

Originally Posted by MyFavco

Here is a little study I did on the domestic housing market in Queensland which I would like to share.....

The rationale is that periods of Housing Booms are defined as being when the number (trend) of monthly approvals exceeds the 12 month average. The data is from ABS 8731 (the data for April is due out tomorrow).

At times of Housing Activity Booms the following things are happening:

1. Speculators enter the market for a quick turn around profit.
2. Construction prices increase due to increased demand of trades people.
3. Vacant Land prices increase due to increase Builder activitiy and rate of sale for new dwellings.
4. New house prices increase due to a general lift in optisim and influx of new entrants/ upgraders.
5. The larger housing market (resales) will mirror this activity somewhat as existing home owners sell thier current home and switch in to newly built product.

The graph suggests to me that the current housing boom has a long way to run yet and it is a perfectly safe time to get in to a housing project.

image hosted on flickr

Ummm...Lol?

http://www.watoday.com.au/wa-news/pe...ml?from=age_ft

Perth's performance was the second-worst of the state capitals for the month, behind Brisbane.

Qld has consistently had the worst auction clearance rate with below 30% and the number of listings in the Brissy/GC areas have been creeping upwards since the start of the year.

No, I think it's stagnation from here (I've been saying that all the govy stimulus being thrown at housing will wear off to around winter this year), especially in Qld (which is already seeing areas DROP) which, from what I've seen has been the worst performing market this year. WA is the next worst with these two states being the first to rollover, followed by the "mortgage belt" western suburbs of Sydney which is already seeing some new home buyers in negative equity.

Outside of another government stimulus, I don't think we're gonna get more "booming prices" for a long time, I just don't see where else the drive will come from. It seems Bligh is offering a new grant of $4k for new "rural builds" (ding ding) in SE Qld, but this will only put pressure on increasing supply unlike the FHOG which mainly went into existing stock.

[Skyrazer]

Originally Posted by cowface

The Lowy Institute's poll on foreign policy asked:

Today, which one of the following do you think is the world’s leading economic power?




In Reality (GDP, PPP)





Average Chinese standard of living:




God, we're fucking ignorant.

Via Pollytics

I imagine some people would misinterpret the question as asking what is the fastest growing economy in the world?

[wardenclyffeforever]

Surely the correct answer is actually the EU, not the US?

[MILIUX]

The EU is the largest followed by the U.S by nominal GDP. However, if PPP GDP then the U.S is ahead of the EU.

[wardenclyffeforever]

What is Purchasing Power Parity, anyway? And why should I care?

[tayser]

You're posting in a thread titled "The Economic Outlook" - why are you posting here if you don't care?

[Yardmaster]

Who owes what (per capita or in total)?

[AtD]

GDP up 0.5% for March, 2.7% Year to March.
http://www.abs.gov.au/ausstats/abs@....0?OpenDocument

State final demand:

NSW  1.4
VIC  1.2
QLD  0.2
SA   1.1
WA   0.9
TAS  0.8
NT   1.1
ACT  1.2

Australian economy continues to grow: ABS

Latest ABS figures show that GDP, in seasonally adjusted volume terms, grew 0.5% in the March quarter 2010. December quarter 2009 growth was revised to 1.1%, from an initially published 0.9%. Growth through the year to March quarter 2010 was 2.7%.

Growth in the expenditure measure of GDP was driven by an 11.6% increase in public investment and a 0.6% increase in household expenditure. Offsetting these increases was a fall in private investment (down 0.6%) and in net exports. The fall in net exports was due to an increase in imports (up 1.8%) while exports fell (down 0.5%).

The industries that provided the main contribution to growth in the production measure of GDP in the March quarter were Finance and insurance services with a 2.4% increase in seasonally adjusted volume terms and Transport, postal and warehousing with a 3.5% increase in seasonally adjusted volume terms.

[MILIUX]

Woohoo! NSW is no longer an economic basketcase anymore.

Weird that WA and QLD scored amongst the lowest. What's happening?

[zach24]

Well actually if the NSW recorded average economic growth over the past 15 years the economy would be 10% to 15% larger than it is today. Long way yet to wipe away the ‘basket case’ tag.