Filtered by Subscriptions: Australia & New Zealand Economics Use setting Australia & New Zealand Economics
House prices to fall in 2023 We continue to expect house prices to begin falling across the eight capital cities in 2023. But the price declines in Sydney and Melbourne in March suggest that the downturn could be starting sooner than we had anticipated. …
1st April 2022
Consumption rose strongly in Q1 The further rise in retail sales in February still leaves them a touch below their November peak but is consistent with our forecast of a solid rise in consumption in Q1. The 1.8% m/m rise in retail sales values in February …
29th March 2022
Full employment will drive RBA to hike rates The further decline in the Australian unemployment rate takes the labour market closer to full employment, setting the RBA up to hike rates in June. The 77,400 rise in employment in February was well above the …
17th March 2022
Strong rebound to persist in 2022 The rebound in GDP at the end of last year was larger than the RBNZ was anticipating, which should keep the Bank on its hiking track. And we expect the rebound to have continued in the current quarter despite New …
16th March 2022
Output will return to pre-virus trend by middle of the year Q4’s jump in GDP brought output closer to its pre-virus trend and we think it will get there next quarter already. But with tighter monetary policy looming on the horizon, growth is set to slow …
2nd March 2022
House prices probably won’t start falling just yet Leading indicators remain consistent with solid house price growth, but if the recent moderation turns into an outright slump, the RBA will not hike rates as aggressively as we anticipate. The 0.1% m/m …
1st March 2022
Consumption kept rising throughout Omicron wave The rebound in retail sales in January suggests that the Omicron wave had a much smaller impact than many had feared and consumption will probably keep rising this quarte r. The 1.8% m/m rise in retail sales …
28th February 2022
Investment to rebound in earnest in the years ahead We estimate that private investment rose by a modest 0.7% q/q in Q4, but firms’ expectations of future capital expenditure suggest investment will strengthen before long. The private capital expenditure …
24th February 2022
Wage growth to approach 3% by year-end The Q4 wage data won’t alter the RBA’s view that inflation isn’t sustainably within its 2-3% target band yet, but we still expect the Bank to start hiking in June as inflation surprises to the upside. The 0.7% q/q …
23rd February 2022
Unemployment rate to resume its descent before long The further rise in Australian employment despite the Omicron outbreak in January highlights the resilience of the Australian labour market and supports our forecast that the RBA will hike rates in June. …
17th February 2022
Drag from trade in Q4 won’t persist The fall in the trade balance in December is consistent with trade having been a sizable drag on growth at the end of last year. The 5.0% m/m rise in import values was much stronger than the 0.8% m/m rise in export …
3rd February 2022
Tight labour market will keep RBNZ hiking cycle going The further decline in the unemployment rate to a record low of 3.2% will keep the RBNZ on its hiking cycle in the months ahead. But we suspect the unemployment rate will rise again before long. The …
2nd February 2022
Surging inflation will keep RBNZ hiking cycle underway The persistent rise in inflation to the highest levels in 30 years will be worrying the RBNZ. That’s why we expect the Bank to hike aggressively in the first half of this year. Consumer prices rose …
26th January 2022
Inflation above target mid-point sets stage for rate hikes this year The strong rise in underlying inflation at the end of last year means the RBA is all but certain to end its asset purchase scheme at its meeting next week. And with underlying inflation …
25th January 2022
Tight labour market will support RBA to end QE The further decline in the Australian unemployment rate in December supports our forecast that the RBA will end its asset purchases in February. The 64,800 rise in employment in December was slightly above …
20th January 2022
Consumption to fully recover from lockdowns this quarter November’s data support our view that GDP will surpass its pre-delta level in Q4. But while the strength in retail sales is set to fade in the months ahead as Omicron weighs on consumption, the …
11th January 2022
House prices to fall in 2023 The easing in house price growth in December will continue in 2022. And we expect further tightening in lending standards and rises in interest rates to cause house prices to fall in 2023. The 1.0% m/m rise in house prices …
4th January 2022
Labour market strength points to early end to RBA bond purchases The remarkable recovery in Australia’s labour market following the recent lockdowns suggests that the Reserve Bank of Australia will end its asset purchases altogether in February. The …
16th December 2021
Activity already rebounding The fall in New Zealand’s output in Q3 will have partially unwound in Q4 as lockdowns were gradually eased. And the fact the fall in GDP was much smaller than the RBNZ’s forecast supports our view that the Bank will lift …
15th December 2021
Net trade to turn into a drag as imports bounce back While it’s early days , the October trade figures suggest that net trade will turn into a drag on GDP growth yet again as imports rebound after the end of lockdowns . The 3.3% m/m drop in export values …
2nd December 2021
House prices to fall in 2023 Housing demand remains very strong, but rising interest rates and lending restrictions should result in a further slowdown in house price growth next year. The 1.1% m/m rise in seasonally-adjusted house prices across the eight …
1st December 2021
GDP growth to keep surprising to the upside With private consumption now rebounding strongly as lockdowns have ended, output in states not affected by lockdowns continuing to rise, and capital spending resilient, we expect GDP to surpass its pre-Delta …
Consumption to fully recover from lockdowns this quarter The 4.9% m/m jump in retail sales in October brought them very close to their May peak and supports our view that consumption will reverse nearly all of the plunge during the lockdown this quarter . …
26th November 2021
Investment to rebound as lockdowns end Private capital expenditure dropped during the recent lockdowns but firms’ forecasts point to a strong rebound over the coming quarters. The 2.2% q/q drop in private capital expenditure in Q3 was broadly in line with …
25th November 2021
Wage growth will firm up next year putting pressure on the RBA The 0.6% q/q rise in the wage price index in Q3 will provide the RBA with some confidence that rates need to remain low in the near term. But we think that wage growth will rise over 2022, …
17th November 2021
Unemployment rate to fall again in the months ahead The rise in the unemployment rate suggests that the labour market continued to suffer right up until the end of the recent lockdowns. But given the ending of lockdowns in mid-October we expect the …
11th November 2021
Striking labour market improvement points to more aggressive hiking cycle The decline in the unemployment rate to 3.4% should encourage the RBNZ to hike rates more aggressively than we had previously anticipated in the months ahead. The massive 2.0% q/q …
2nd November 2021
House prices will come off the boil next year Strong demand means that house prices will keep rising at a strong pace over the next few months, but we think that lending restrictions will result in a slowdown next year. Across the eight capital cities, …
1st November 2021
Consumption to surpass pre-delta high in Q1 2022 The rise in retail sales in September means that the trough in consumption is now behind us. We expect retail sales to rebound in Q4 as restrictions relax and a growing number of Australians are able to …
29th October 2021
Strong underlying inflation will keep pressure on the RBA The decline in headline inflation in Q3 was entirely driven by base effects. More importantly, the strong rise in underlying inflation will keep pressure on the RBA to keep reducing monetary …
27th October 2021
Surging inflation will add fuel to RBNZ hiking cycle While we think the surge in inflation will start to abate in the year ahead, the strength will surely be worrying the RBNZ, supporting the case for further rate hikes. Consumer prices rose 2.2% q/q in …
18th October 2021
Unemployment rate to fall towards 4% next year While employment plunged yet again in September, hours worked started to rebound and the end of lockdowns will result in a rapid recovery in the labour market over coming months. The 138,000 fall in …
14th October 2021
Record trade surplus to support growth The record trade surplus in August came despite the plunge in iron ore prices in August. The upshot is that net trade should provide a boost to GDP growth in Q3 as domestic demand weakens. Export values of goods and …
5th October 2021
House price growth will ease in 2022 House prices have continued to surge despite the recent lockdowns. But we expect house price growth to slow next year as affordability constraints bite and macroprudential limits are imposed. Across the eight capital …
1st October 2021
Labour market to approach full employment by end-2022 Employment plunged by 1.1% m/m in August, but we still think that the unemployment rate won’t surpass it pre-Delta level over the coming months even as the participation rate rebounds . The 146,300 …
16th September 2021
Plunge and a rebound ahead The strength in activity in Q2 was partly driven by the travel bubble which burst in Q3 as New Zealand went into lockdown. While we expect domestic demand to recover toward the end of the year, services trade may not rebound as …
Trade should support growth in Q3 The record trade surplus in July was largely driven by stronger commodity prices which won’t last. But we expect weaker domestic demand to weigh on imports over the coming months which should see trade make a positive …
2nd September 2021
Output to plunge in Q2, but recession unlikely The further rise in GDP in Q2 was broadly in line with the RBA’s expectations and we suspect the Bank will press ahead with tapering its asset purchases this month . The 0.7% q/q rise in output marked a …
1st September 2021
Lockdowns weighing on house price growth The drag from the current lockdowns on the housing market won’t last, but we expect house price growth to slow in earnest next year as affordability constraints bite. Across the eight capital cities, house prices …
Sales will fall further before rebounding The decline in retail sales in July highlights the impact that lockdowns are having on the Australian economy. And with lockdowns spreading and intensifying in August, sales will fall further before they rebound. …
27th August 2021
Firms still keen to invest when lockdowns ease We estimate that private investment rose by 1.5% q/q in Q2 and firms’ expectations of future capital expenditure suggest firms are still keen to invest when lockdowns ease. Today’s private capital expenditure …
26th August 2021
Falling unemployment rate should keep RBA on track The further decline in the unemployment rate in July may not last long, but it should be more than enough to convince the RBA to proceed with its plans to taper asset purchases in September. The 2,200 …
19th August 2021
Sluggish wage growth means RBA won’t hike next year The subdued 0.4% q/q rise in the wage price index in Q2 underlines that the tight labour market didn’t generate large cost pressures even before the latest virus restrictions. That increase marked a …
18th August 2021
Headwind from net trade won’t last much longer Given that most of the rise in exports last quarter was driven by higher commodity prices, net exports probably provided another big drag on GDP growth in Q2 . But we think that won’t last much longer. …
5th August 2021
Consumption will decline in Q3 The decent rise in real retail sales last quarter is consistent with a further rise in consumption in Q2. But given the lockdowns in Q3, we expect consumption to decline before long. The 1.8% m/m decline in retail sales …
4th August 2021
Low unemployment rate locks in RBNZ rate hike The decline in the unemployment rate to 4.0% all but confirms our forecast that the RBNZ will hike rates at its August meeting. The 1.0% q/q rise in employment was above the Bloomberg median forecast of a 0.7% …
House prices boom not over yet House prices are continuing to surge and forward indicators suggest the upswing has a little further to run. Even so we think house price growth will slow in 2022. Across the eight capital cities, house prices rose by 1.6% …
2nd August 2021
Inflation will keep surprising to the upside Most of the surge in inflation in Q2 was driven by base effects that will unwind over the next couple of quarters, but we think that inflation will remain stronger than the RBA is anticipating. The 0.8% q/q …
28th July 2021
Strong inflation locks in RBNZ rate hike We had already expected the RBNZ to hike rates in August and the surge in inflation in Q2 only bolsters our confidence in that forecast. Consumer prices in Q1 rose 1.3% q/q, well above the analyst consensus of a …
16th July 2021
Tight labour market set to lift wage growth before long The labour market continued to tighten in June and while the lockdown in New South Wales may result in some bumps over the next couple of months, we expect wage growth to accelerate soon . The 29,100 …
15th July 2021