Australia & New Zealand Economics Update Services inflation will remain stubbornly high With labour productivity falling the most on record over the past year, unit labour cost growth has surged even as hourly earnings growth has remained sluggish. While we expect productivity growth to... 6th March 2023 · 3 mins read
Australia & New Zealand Economics Update Dwellings investment won’t fall as sharply Although the fall in house prices slowed significantly in February, we are not convinced that Australia’s housing market is out of the woods yet. Even so, there are growing indications that dwellings... 2nd March 2023 · 3 mins read
Australia & New Zealand Economics Update Housing downturn not over just yet House prices bounced back in February, led by Sydney. While leading indicators point to an improvement in housing market activity, the RBA’s determination to raise interest rates further means that... 24th February 2023 · 3 mins read
Australia & New Zealand Economics Update RBNZ will stop hiking at 5.25% Even though the Reserve Bank of New Zealand slowed the pace of tightening at today’s meeting, it still signalled a peak in the overnight cash rate of 5.50% by the middle of this year. Our more... 22nd February 2023 · 4 mins read
Australia & New Zealand Economics Update Housing downturn will be deflationary Rent inflation is set to approach 10% as the surge in net migration coupled with lower home completions has pushed rental vacancy rates to record low. But that rise will be overwhelmed by the slowdown... 20th February 2023 · 2 mins read
Australia & New Zealand Economics Update RBA signals more tightening to come The RBA raised interest rates by another 25bp and signalled that further tightening will be needed. We’re sticking to our forecast that the Bank will lift the cash rate to an above-consensus 3.85% by... 7th February 2023 · 3 mins read
Australia & New Zealand Economics Update Housing supply shortages starting to ease The shortage of new housing caused by the government’s HomeBuilder grant is showing signs of easing. That means that the housing downturn should start to weigh on homebuilding in earnest and that new... 18th January 2023 · 2 mins read
Australia & New Zealand Economics Update Fixed-rate expiry large shock to household finances The full impact of the RBA’s aggressive tightening cycle on household finances hasn’t been felt yet because one-third of all mortgages have fixed-rates. Around 60% of those will expire next year and... 13th December 2022 · 3 mins read
Australia & New Zealand Economics Update RBA not backing away from rate hikes just yet The RBA today hiked the cash rate by 25bp as widely anticipated and while the statement was marginally less hawkish, we’re sticking to our view that the Bank will lift the cash rate to 3.85% by April. 6th December 2022 · 3 mins read
Australia & New Zealand Economics Update Long-term impact of energy price caps may be positive The proposed caps on domestic prices of thermal coal and natural gas are unlikely to be a major drag on mining investment because the bulk of coal and gas production is exported. And by helping to... 5th December 2022 · 4 mins read
Australia & New Zealand Economics Update Multi-employer pay deals add upside risks to inflation The proposed multi-employer wage agreements risk further fuelling inflation by disruptive industrial action. And while employers could circumvent them by striking traditional enterprise agreements... 24th November 2022 · 3 mins read
Australia & New Zealand Economics Update RBNZ will probably lift rates to 5.5% The Reserve Bank of New Zealand hiked the overnight cash rate by 75bp as most had anticipated but signalled a much higher peak in the OCR than in August. We’re now forecasting another 75bp hike in... 23rd November 2022 · 3 mins read
Australia & New Zealand Economics Update Energy price caps could knock off 1%-pt from inflation The proposed price caps on thermal coal and natural gas would knock off around one to 1.25%-pts from overall inflation though the full impact would only materialise in the second half of next year. 8th November 2022 · 4 mins read
Australia & New Zealand Economics Update RBA to lift rates more sharply than most expect The Reserve Bank of Australia hiked rates by 25bp today and the upward revision to its inflation forecasts are consistent with our view that rates will peak at an above-consensus 3.85%. However, we... 1st November 2022 · 3 mins read
Australia & New Zealand Economics Update Budget repair will worsen economic slowdown The Treasurer resisted the temptation to spend the tax windfall from high commodity prices in today’s Budget. But with high inflation lifting payments by at least as much as receipts, the government... 25th October 2022 · 3 mins read
Australia & New Zealand Economics Update 5% peak in OCR will worsen housing downturn This publication has been resent due to an error with the previous email. The continued strength in inflation will encourage the Reserve Bank of New Zealand to hike the overnight cash rate by 75bp in... 20th October 2022 · 3 mins read
