Peter Switzer comments on Finance @ Yahoo7
“Every time I interview Australia’s academic bear – Associate Professor Steve Keen from the University of Western Sydney (he predicted a 40% slump in real estate prices in Australia) I always need a positive booster to remind me that the Australian economy is an out-performer and looks poised to beat the global worst case scenarios put forward by other bearish or negative economists.”
The Good News
Expanding Economy
The best news was that our economy expanded by 0.4% in the March quarter after contracting by a revised 0.6% in the December quarter, and it meant we dodged an official recession. This was a real confidence booster for consumers and business owners who were wondering when the worst of this economic downturn would hit.
After this reading, CommSec came out and predicted the economy would probably grow by only 0.6% this financial year, but 2.1% growth for 2009-10 and then a big 4.1% growth for 2010-11.
Retail Sales
The month of May kept the merriment coming with retail sales rising by 1% after going up 0.3% in April. In annual terms retail sales were up 7.1% on a year ago and this is the biggest annual increase since December 2007.
Housing Prices
On the real estate front, the RP Data-Rismark Hedonic Australian Home Value Index rose by 0.9% in May and by 1.6% over the year. In the first five months of 2009, Australian dwelling prices were up 3.9%, translating to a 9.4% annual rate
Business Confidence
The NAB measure posted its biggest monthly gain in eight years. It was helped by a positive global share market and promises of big infrastructure spending.
The monthly business survey showed business confidence rose 12 index points in May to minus-2 index points, the largest one-month jump since May of 2001. The index went to the highest level since February of 2008.
Consumer Confidence
The Westpac-Melbourne Institute consumer sentiment index recording the biggest back to back gain since records started 36 years ago. The index rose by 9.3% in July, which is a 19-month high.
Our Biggest Trading Partner
In China retail sales in May rose to an annual rate of 15.2% annual rate and industrial production expanded at 8.9%. Chinese banks lent a record 5.83 trillion Yuan in the first five months of 2009 more than the minimum yearly target of 5 trillion. And finally, CommSec reports that China’s urban fixed asset investment for spending on roads, power plants, etc. grew at annual rate of 32.9% in the first five months of the year. This was the largest increase recorded in the last five years.
The Bad News
As Peter Switzer says “Regrettably, I have run out of room for the bad news, so that will have to wait for another day. I will try to remember to do that, not!”
http://au.biz.yahoo.com/switzer/finance/15072009/note_good_news.html
