In the balance

Stephen Roberts

The Australian economy is showing signs of growing at an acceptably firm pace over the medium term and with inflation starting to lift towards the RBA’s 2-3% target according to recent commentaries by the RBA including the speech given by Governor Philip Lowe yesterday. There are several key assessments and... Show More

Why China will determine Australian House Prices

Stephen Roberts

Persistently strong growth in house prices in Melbourne and Sydney continue to drive up approvals to build new homes, especially approvals to build multi-occupancy home units. The latest August home building approvals numbers released yesterday were again surprisingly strong showing seasonally adjusted approvals at 20,788, only slightly down on the... Show More

Housing conundrum

Stephen Roberts

The boom in construction of high density housing in the south-eastern states of Australia is refusing to die for the time being even amid a growing list of factors that should be bringing the market to its knees. Extension of the home unit building boom implies that home building activity... Show More

Slower growth ahead, but not just yet

Stephen Roberts

We see spending on housing and household consumption spending as the key elements determining near-term strength in GDP growth, but also longer-term weakness. Reasons abound why Australia’s annual GDP growth rate is likely to moderate over the next year or two. The list includes 1) Moderating growth in Australia’s major... Show More

A somber rate cut

Stephen Roberts

The immediate reaction in financial markets to the RBA’s decision to cut its cash rate 25bps to a record low 1.50% was far from a warm welcome. The share market fell, medium-to-longer term bond yields rose and the Australian dollar after briefly falling has risen against the US dollar overnight.... Show More

Tempting Fate

Stephen Roberts

Financial markets and we are assuming that the Q2 CPI and underlying inflation readings due later this morning will be low again. By low we mean around 0.4% q-o-q which would reduce annual headline inflation to around 1.1% y-o-y and average underlying inflation (based on the trimmed mean and weighted... Show More

The 97% / 3% economy

Stephen Roberts

In the period of the start to end of Australia’s China-fuelled resource investment spending boom the two (make that multi) speed growth nature of the economy has been a popular theme. When mining resource investment spending was growing at its strongest pace early in the decade Western Australia, Queensland and... Show More

Economic Insights - The swing factor in the outlook for spending – and Australia’s economic growth prospects in the near term - rests with the household sector

Stephen Roberts

Ability and willingness to spend: How well or poorly the Australian economy grows over the next year will depend upon the relative strength of household spending. Of course there are other contributions to growth in expenditure-based GDP – government consumption and capital spending, business capital spending and exports – but... Show More

Big macro themes for second half of 2016

Stephen Roberts

In this article I look at some of the big macro themes to watch this year and next. These include: 1) Slow global economic growth threatening to slow further; 2) Strong disinflationary pressure; 3) Angry voters turning towards protectionism and denying the benefits of globalization; 4) Weak government policy responses... Show More

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