Filtered by Subscriptions: Australia & New Zealand Economics Use setting Australia & New Zealand Economics
Lockdowns to weigh on retail sales in June Retail sales are sure to decline in June as the impact of the recent lockdowns weighs on household consumption. Even so, the rise in retail sales in May means the risks to our forecast the consumption was …
5th July 2021
Net trade to turn from drag to boost While export values hit a record high in May, this was largely driven by soaring export prices and export volumes probably dropped back. However, we think that the drag from net trade on GDP growth will fade before …
1st July 2021
House prices to continue booming a little longer House prices are continuing to surge and forward indicators suggest the upswing has a little further to run. But we suspect the boom will peter out by the end of the year and prices will decline a little in …
Extraordinary labour market recovery to continue The surge in employment in May demonstrates that the labour market is continuing its extraordinary rebound which supports our call for the RBA to move to a flexible asset purchase programme in July. The …
17th June 2021
Solid rebound in activity to persist The solid rise in activity in Q1 means that New Zealand easily avoided a second technical recession and we expect GDP to continue its rebound over the rest of 2021. The 1.6% quarterly rise in production GDP was …
Drag from net trade may persist The trade surplus widened again in April but that was largely driven by higher commodity prices. Export volumes will need to recover further in the months ahead to prevent trade from being a drag on GDP growth yet again in …
3rd June 2021
Recovery set to slow as GDP already above pre-virus peak Australia's GDP surpassed its pre-virus level in Q1 but with the vaccination rollout still slow and a fresh lockdown in Melbourne, the recovery is set to slow . The 1.8% q/q rise in Q1 GDP was …
2nd June 2021
House prices may decline in 2022 House prices are surging but forward indicators point to growth slowing in the months ahead. Indeed, we suspect prices may decline a little in 2022. Across the eight capital cities, house prices rose by 2.3% m/m in May, …
1st June 2021
Capital investment rebound to continue We estimate that private investment rose by 4.1% q/q in Q1 and firms’ expectations of future capital expenditure suggest the strong rebound in investment is set to continue in the months ahead. Today’s private …
27th May 2021
Jobs growth to resume, but at slower pace While the economy shed some jobs after the JobKeeper wage subsidy scheme came to an end, the surge in vacancies suggests employment will keep rising over the coming months . The 30,600 decline in employment in …
20th May 2021
Wage growth will rise further but still has a long way to go The strength in wage growth in Q1 was partly due to one-off factors which will fade in the year ahead, but we still think the tightening in the labour market will see wage growth rise in earnest …
19th May 2021
Consumption may only return to pre-virus levels in second half The drop in real retail sales in Q1 suggests that the recovery in consumption slowed last quarter. And with the vaccination drive still slow, we think that consumption will only return to …
10th May 2021
Tighter labour market to herald RBNZ hikes next year The fall in the unemployment rate to 4.7% in New Zealand is consistent with our view that a continued tightening in the labour market will prompt the RBNZ to hike rates next year. The 0.6% q/q rise in …
5th May 2021
Above target inflation won’t be sustained The weakness in underlying inflation in Q1 is consistent with our view that the Reserve Bank of Australia will announce a third $100bn round of asset purchases before long. And it suggests that the financial …
28th April 2021
Continued strength in inflation will support rate hikes next year We think underlying inflation will remain close to the RBNZ’s target for the foreseeable future which supports our view that the RBNZ will hike rates next year. Prices in Q1 rose 0.8% q/q, …
21st April 2021
Employment to keep rising even as JobKeeper ends The continued tightening of the labour market in March means that a further extension of quantitative easing isn't a done deal, but amid weak wage growth and inflation we still expect the RBA to press ahead …
15th April 2021
House price growth should ease later this year House prices are surging but forward indicators somewhat mixed and we suspect the pace of price growth will ease in the second half of this year. Across the eight capital cities, house prices rose by 2.8% m/m …
1st April 2021
Trade may have been a drag on growth in Q1 Retail sales and the trade surplus declined in February but while we still expect consumption to rise in Q1, net trade may have been a drag on growth. The trade surplus narrowed in February from $9.6bn to $7.5bn …
Tightening in the labour market has further to run The surge in employment in February is consistent with our view that the Australian labour market is tightening much faster than most expect. The 89,100 rise in employment in February much stronger than …
18th March 2021
Second technical recession all but confirmed The solid decline in activity in Q4 means that a second recession is imminent as GDP is bound to decline in Q1. The 1.0% quarterly fall in production GDP was larger than the Bloomberg consensus of a 0.2% q/q …
17th March 2021
Trade should support GDP growth in Q1 Retail sales and the trade balance rose in January and while we expect retail sales to be subdued in the months ahead, export values may have further to rise. The trade balance widened in January from $7133bn to a …
4th March 2021
Output to return to pre-virus levels by middle of the year The 3.1% q/q rise in Q4 GDP left output just 1.1% below pre-virus levels and we think it will surpass that threshold by Q2. The increase in GDP was stronger than the Bloomberg median of 2.5% and …
3rd March 2021
House prices to continue rising this year House prices are now surging which poses an upside risk to our forecast that prices will rise 10% between January and December this year. Across the eight capital cities, house prices rose by 2.1% m/m in February, …
1st March 2021
Capital investment set to surge this year We estimate that private investment rose by 2.6% q/q in Q4, and firms’ expectations of future capital expenditure suggest investment is set to surge this year. Today’s private capital expenditure survey showed a …
25th February 2021
Wage growth will need to strengthen much further for RBA to hike The jump in wages in Q4 was partly due to temporary wage cuts implemented during the pandemic unwinding, but it supports our view that wage growth will rebound more sharply than most …
24th February 2021
Unemployment to keep falling rapidly While employment growth slowed in January, it should remain strong enough to lower the unemployment rate to 5.5% by the end of this year . The 29,100 rise in employment in January was a bit weaker than the consensus of …
18th February 2021
Retail Sales to ease from here The decline in retail sales in December largely just reflects the impact of Black Friday sales. Given the reopening of the Victorian economy in Q4 consumption probably still rose strongly in the quarter. Retail sales values …
5th February 2021
Net trade to remain broadly neutral December’s rise in exports partly reflects higher commodity prices and with goods import volumes above pre-virus levels, we think that net trade won’t be a big contributor to GDP growth over coming quarters. The 2.8% …
4th February 2021
Unemployment rate should continue to decline in 2021 The fall in the unemployment rate to 4.9% in New Zealand means the rate is already past the peak and we expect the labour market to continue to tighten throughout 2021. The 0.6% q/q rise in employment …
2nd February 2021
House prices to rise by 10% in 2021 House prices are already rising at a solid pace but forward indicators suggest that the pace of gains is set to increase in the months ahead. Across the eight capital cities, house prices rose by 0.7% m/m in January, …
1st February 2021
Underlying inflation to strength this year The rise in inflation in Q4 was partly driven by volatile movements but we think inflation will rise in earnest before long. The 0.9% q/q rise in consumer prices in Q4 was higher than the consensus forecast of …
27th January 2021
Inflation to continue its rise in 2021 The sharp rise in underlying inflation in Q4 is consistent with our view that the RBNZ will tighten policy in the years ahead. Prices in Q3 rose 0.5% q/q, well above the analyst consensus or than the RBNZ’s latest …
21st January 2021
Unemployment Rate to continue to plunge The further decline in the unemployment rate in December is consistent with our view that the RBA will not extend its asset purchases beyond April. The 50,000 rise in employment was in December was exactly in line …
Trade was a modest drag on growth in Q4 A surge in imports meant that the trade balance narrowed in November so we now think that trade was a modest drag on growth in Q4. The decline in the trade balance from $6583mn in October to $5022mn in November was …
7th January 2021
House prices may rise by 10% in 2021 House prices continue to rise strongly in Australia and we now think they will rise by 10% between the end of 2020 and the start of 2021. Across the eight capital cities, house prices rose by 0.9% m/m in December. …
4th January 2021
Upside surprise is under way The fall in the unemployment rate to 6.8% in November leaves it on track to fall to 6% by the middle of next year and is consistent with our view that the RBA won’t expand quantitative easing any further. The 90,000 rise in …
17th December 2020
Strong rebound sets the stage for solid 2021 The extraordinary rebound in New Zealand’s GDP was probably driven, in part, by the release of pent-up demand, but we still expect output to rise further in the months ahead. The 14.0% quarterly rise in …
16th December 2020
Rebound in retail sales to continue in November The rebound in retail sales in October is likely to be overshadowed by an even larger increase in November as Victoria reopens . The 1.4% m/m rise in retail sales values in October was smaller than the …
4th December 2020
Trade won't big a big drag on growth again in Q4 The trade balance widened in October but the widening was partly driven by price effects so we estimate that net exports made little contribution to GDP growth in Q4. The rise in the trade balance from …
3rd December 2020
Output to return to pre-virus levels by Q2 2021 The rebound in Q3 GDP reversed around 40% of the decline during the first half of the year and we expect output to return to pre-virus levels by mid-2021. The 3.3% q/q rise in Q3 GDP was stronger than most …
2nd December 2020
House prices may rise by 7% next year House prices are now rising in Australia and we reiterate our forecast that house prices will rise by 7% in 2021, though the risks look skewed to the upside. Across the eight capital cities, house prices rose by 0.8% …
1st December 2020
Capital investment may be approaching its trough We estimate that private investment fell by a modest 1.2% q/q in Q3, and firms’ expectations of future capital expenditure suggest we may be near the trough in investment . Today’s private capital …
26th November 2020
The unemployment rate is past its peak The surge in employment in October largely preceded the relaxing of restrictions in Victoria so we expect that November data should show a further rise. The 178,800 rise in employment in October was much larger than …
19th November 2020
Annual wage growth should continue to ease The weakness in wage growth in Q3 was partly driven by the delay to the minimum wage increase but we still think overall wage growth will remain soft in the years ahead. The wage price index (WPI) showed wages …
18th November 2020
Trade may a remain a drag on growth in the coming months The widening of the trade balance in September was not enough to prevent trade from being a significant drag on growth in Q3. The rise in the trade balance from $2617mn in August to $5629mn in …
5th November 2020
Rebound in consumption has much further to run The strong rebound in retail sales in Q3 was probably matched by a rebound in services consumption and has further to run as Victoria reopens . The 1.1% m/m drop in retail sales values in September was …
4th November 2020
Unemployment rate won’t rise as much as most believe The rise in the unemployment rate to 5.3% in New Zealand in Q3 means the unemployment rate is close to its peak and we expect the labour market to tighten next year. The 0.8% q/q decline in employment …
3rd November 2020
House prices may rise by 7% next year Australia’s housing downturn came to an end last month and we reiterate our forecast that house prices will rise by 7% in 2021, led by Sydney. Across the eight capital cities, house prices rose by 0.4% m/m in October. …
2nd November 2020
Underlying inflation to remain subdued The surge in quarterly inflation in Q3 only unwound some of the weakness in Q2 and we still expect underlying inflation to remain weak for years to come. The 1.6% q/q rise in consumer prices in Q3 was the largest …
28th October 2020
Inflation to ease further in the months ahead The further easing in headline and underlying inflation in Q3 are consistent with our view that weak inflation will prompt the RBNZ to cut rates into negative territory next year. Prices rose by 0.7%q/q in Q3, …
23rd October 2020