These 7 Charts Are All The Proof You Need That The Australian Economy Is Picking Up Speed Again

The Australian economy is picking up steam again, according to UBS economists Scott Haslem and George Tharenou, who say that their “super leaders” of the Australian economy clearly signal that the pre- and post-budget lull has given way to an continued economic “rebound”.

They say that retail is rebounding, the jobs market is looking healthier, consumer confidence is back and demand for home loans is helping the property market.

Here is their take on each of these indicators.

Retail Sales

The weekly BDO retail series has softened through the second half of July, consistent with relatively ‘flat’ July retail sales (Figure 2). But this follows a likely solid rebound in June (due 4 August), post a very weak May, with the y/y overall holding near 5%. Furniture and household goods continues to show one of the stronger monthly trends.


Weekly SEEK job ads through July point to a further monthly gain in the ANZ job ads series (Figure 1), due 4 August.

This is consistent with an ongoing improvement in the jobs market, post May’s hiring ‘pause’, and points to a lift in y/y jobs growth to 1½% by end-14 (Figure 3), sufficient to stabilise the unemployment rate.

Consumer Confidence

The weekly Roy Morgan/ANZ consumer confidence series shows a strong rebound through July (Figure 4), fully retracing back to the Q1 level (pre the Federal Budget), though still below Q413 highs. This is consistent with a further modest rise in the monthly Westpac-Melbourne Institute series for August (due 13 August).

Home Loans and Housing

Cannex bank lending data point to a renewed rise in June lending for housing (due 8 August), after several months of ‘flattening’ (Figure 5).

Weekly auction clearance rates have stayed high, albeit Melbourne has eased, while Sydney has lifted strongly (Figure 6).

Daily RPData-Rismark price data (Figure 7) point to another solid rise in monthly housing prices (due 1 August), albeit the y/y pace will remain near 10%.

All of which leads Haslem and Tharenou to conclude that “Overall, our super-leaders have – over the past couple of weeks – continued to point to
a recovery in the economy’s momentum, post mid-Q2’s budget-induced confidence hit”.

That sounds like very good economic news.

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