Report Published: February 2017
The December quarter GDP figures, due next week, will show strong growth of around 1% (perhaps as high as 1.5%) and annual growth around 2.5%. But we shouldn’t get carried away. The quarterly figure will be a rebound after the dismal September quarter.
Aggregate profits probably rebounded last quarter, boosted by the significant lift in commodity prices and export volumes. Stronger domestic activity should also underpin higher non-mining profits. But the profit rebound could be temporary. Expected declines in iron ore, coal and gold prices over the next year will see mining profits recede, despite higher mining production and exports. Slower growth in domestic demand and still weak price inflation will also crimp non-mining business profits.
Investment markets face headwinds as rising interest rates cause a softening of yields (and prices) for equities (shares and commercial property) and weak returns to bonds. They’ve had a charmed run this decade as falling interest rates drove a search for yield. That will now reverse as interest rates rise. We expect lower returns over the next few years, making it a difficult time for investment markets. We need to look for growth sectors with rising income to offset the impact of rising interest rates. Even moderate total returns will look good over the next few years.
Australia recorded a record monthly surplus of $3.5 billion in December, and more record trade surpluses are expected over the near term. Higher export prices and faster growth in export volumes compared to import volumes will not only drive a huge improvement in the current account deficit over the next 2 to 3 years, they will boost real GDP and help offset weak domestic demand. This is the pay-off for the mining investment boom of the past decade.
Topics in this month’s Bulletin:
- Latest data confirming December quarter rebound in economic growth
- Underlying inflation near its low point, but expected to slowly rise over next 2 years
- Sea change in drivers of Investment Returns
- Net exports boosting GDP, while dramatically reducing the Current Account Deficit
- Analysis of December quarter National Accounts and profits and revised forecasts
- Investment and construction outlook
- Update on the global economic outlook – how are perceptions of growth changing due to Trump
- The crisis in energy markets, and the potential impact on Australian manufacturing
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Adobe PDF document files for download by subscribers.
EO BULLETIN FEBRUARY 2017 (pdf, 1.35 MB)
EO BULLETIN DECEMBER 2016/JANUARY 2017 (pdf, 1.16 MB)
EO BULLETIN NOVEMBER 2016 (pdf, 663 KB)
EO BULLETIN OCTOBER 2016 (pdf, 684 KB)
EO BULLETIN SEPT 2016 (pdf, 758 KB)
EO CHARTBOOK SEPT 2016 (pdf, 1.80 MB)
EO BULLETIN AUGUST 2016 (pdf, 1.53 MB)
EO BULLETIN JUNE-JULY 2016 (pdf, 1.11 MB)
EO BULLETIN MAY 2016 (pdf, 834 KB)
EO BULLETIN APRIL 2016 (pdf, 776 KB)
EO BULLETIN MARCH 2016 (pdf, 727 KB)
EO CHARTBOOK MARCH 2016 (pdf, 1.70 MB)
Microsoft Excel spreadsheets and PDF files for download by online subscribers.
EXCHANGE RATES – WEEKLY (xls, 2.31 MB)
INTEREST RATES – WEEKLY (xls, 2.09 MB)
STOCK PRICES – WEEKLY (xls, 5.75 MB)
COMMODITY PRICES – WEEKLY (xls, 1.86 MB)
CALENDAR OF RELEASES AND EVENTS (pdf, 19 KB)
LATEST DATA AND FORECASTS
Microsoft Excel spreadsheets and PDF documents for download by online subscribers.
STATE INDICATORS UPDATED 22.02.2017 (xls, 1.05 MB)
COSTS & PRICES UPDATED 22.02.2017 (xls, 613 KB)
EXTERNAL SECTOR UPDATED 22.02.2017 (xls, 1.14 MB)
FINANCIAL INDICATORS UPDATED 22.02.2017 (xls, 1.84 MB)
BUSINESS INDICATORS UPDATED 22.02.2017 (xls, 878 KB)
ECONOMIC INDICATORS UPDATED 22.02.2017 (xls, 1.67 MB)
PDF document files for download by online subscribers.
FEB 2017 – LATEST DATA CONFIRMING DECEMBER QUARTER REBOUND IN ECONOMIC GROWTH (pdf, 575 KB)
FEB 2017 – UNDERLYING INFLATION NEAR ITS LOW POINT, BUT EXPECTED TO SLOWLY RISE OVER NEXT 2 YEARS (pdf, 69 KB)
FEB 2017 – SEA CHANGE IN DRIVERS OF INVESTMENT RETURNS (pdf, 134 KB)
FEB 2017 – NET EXPORTS BOOSTING GDP, WHILE DRAMATICALLY REDUCING THE CURRENT ACCOUNT DEFICIT (pdf, 319 KB)
DEC 2016/ JAN 2017 – ECONOMY SLIPS IN THE DECEMBER QUARTER BUT NO CHANCE OF RECESSION (pdf, 99 KB)
DEC 2016/JAN 2017 – RISING US INTEREST RATES TO IMPROVE AUSTRALIAN COMPETITIVENESS (pdf, 45 KB)
DEC 2016/JAN 2017 – STATE OF PLAY - JOBS AND RETAIL SPENDING IMPROVE, MOTOR VEHICLE SALES WEAKENING (pdf, 36 KB)
DEC 2016/JAN 2017 – INVESTMENT AND CONSTRUCTION TO DECLINE NEXT 2 YEARS, BUT DIFFERENCES BETWEEN SECTORS (pdf, 129 KB)
DEC 2016/JAN 2017 – PROFITS ANALYSIS AND INDUSTRY OUTLOOK TO 2017/18 (pdf, 88 KB)
NOV 2016 – TRUMP PRESIDENCY AND WHAT IT MEANS FOR AUSTRALIA (pdf, 53 KB)
NOV 2016 – RETAIL TRADE ANALYSIS (pdf, 78 KB)
NOV 2016 – EDUCATION SERVICES EXPORTS (pdf, 40 KB)
NOV 2016 – OUTLOOK FOR EMPLOYMENT BY INDUSTRY SECTOR (pdf, 172 KB)
OCT 2016 – STATE OF PLAY (pdf, 52 KB)
OCT 2016 – INFLATION RISES BUT REMAINS LOW. IS DEFLATION A RISK? (pdf, 33 KB)
OCT 2016 – COMMODITY PRICES ARE RECOVERING – SUSTAINABLE RALLY OR A FALSE DAWN? (pdf, 71 KB)
OCT 2016 – OUTLOOK FOR STATES (pdf, 201 KB)
SEPT 2016 – ECONOMIC OVERVIEW – PRIVATE DEMAND IS STILL SUFFERING FROM POST GFC WEAKNESS. (pdf, 124 KB)
SEPT 2016 – DETAILED GDP, INCOME, EXPENDITURE AND INVESTMENT FORECASTS (pdf, 118 KB)
SEPT 2016 – PROFITS AND INDUSTRY ANALYSIS; CONSTRUCTION AND INVESTMENT OUTLOOK (pdf, 272 KB)
SEPT 2016 – STATE OF PLAY (pdf, 131 KB)
SEPT 2016 – GROWING PART-TIME EMPLOYMENT MEANS CHANGES TO PRODUCTIVITY MEASURE.PDF (pdf, 190 KB)
AUG 2016 – STATE OF PLAY (pdf, 450 KB)
AUG 2016 – WITH PRICE AND WAGE INFLATION LOW, WILL THE RBA CUT RATES AGAIN? (pdf, 436 KB)
AUG 2016 – AN UPDATE ON THE INTERNATIONAL ECONOMY (pdf, 813 KB)
AUG 2016 – IMPACTS OF THE CAR MANUFACTURING SHUTDOWN (pdf, 572 KB)
JUNE/JULY 2016 – GDP GROWTH OF 3 PER CENT UNSUSTAINABLE BEYOND THE NEAR TERM (pdf, 107 KB)
JUNE/JULY 2016 – CONSTRUCTION AND INVESTMENT OUTLOOK (pdf, 284 KB)
JUNE/JULY 2016 – NON MINING BUSINESS INVESTMENT ON A SLOW ROAD TO RECOVERY (pdf, 118 KB)
JUNE/JULY 2016 – FALLOUT FROM THE UK’S DECISION TO LEAVE THE EUROPEAN UNION (pdf, 336 KB)
MAY 2016 – STATE OF PLAY (pdf, 51 KB)
MAY 2016 – INTEREST RATE AND EXCHANGE RATE OUTLOOK (pdf, 134 KB)
MAY 2016 – INFLATION OUTLOOK (pdf, 112 KB)
MAY 2016 – BUDGET WRAP (pdf, 215 KB)
APRIL 2016 – STATE OF PLAY (pdf, 51 KB)
APRIL 2016 – TOURISM CONTRIBUTION TO GDP AND EMPLOYMENT (pdf, 142 KB)
APRIL 2016 – OUTLOOK FOR STATES (pdf, 246 KB)
MARCH 2016 – ECONOMIC OVERVIEW (pdf, 128 KB)
MARCH 2016 – STATE OF PLAY (pdf, 70 KB)
MARCH 2016 – CONSTRUCTION AND INVESTMENT OUTLOOK (pdf, 67 KB)
MARCH 2016 – OUTLOOK FOR INDUSTRY OUTPUT, PROFITS AND EMPLOYMENT (pdf, 79 KB)
Microsoft Powerpoint, Excel and Adobe PDF document files for download by online subscribers.
EO BULLETIN SEPT 2016 (pdf, 758 KB)
EO CHARTBOOK SEPT 2016 (pdf, 1.80 MB)
EO CONFERENCE SLIDES SEPT 2016 – PART 1 (ppt, 1.02 MB)
EO CONFERENCE SLIDES SEPT 2016 – PART 2 (ppt, 862 KB)
EO CONFERENCE SLIDES SEPT 2016 – ENGINEERING CONSTRUCTION OUTLOOK (ppt, 1.81 MB)