Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Wednesday, 5 March 2014

Life in the old dog yet -- Aussie economy +2.8% in 2013

Reports of the death of the Aussie economy have been somewhat exaggerated.

In 2013, the economy recorded growth of 2.8%, which included a respectable 0.8% in Q4 following on from 0.6% in Q3.

Source: ABS

This takes the Aussie economy into 2014, its 23rd consecutive calendar year without a recession.

An outstanding effort.

I'm not sure we need to spend hours delving into the component parts of growth.

In any case, it's the future we're interested in most, not what was happening at the end of last year.

Coming up in 2014 and 2015, the Australian economy faces one major challenge, and that is that capital expenditure will fall as the mining construction boom drops off.

Chart: Financial year actual and expected expenditure- Total Capital Expenditure

Source: ABS

This has been well known for a long time, both in the mining industry and by the RBA.

We can't keep building mines forever, it's true.

Now the mines have to start making us some money in the form of exports. 

And well, we're certainly starting to ramp up the volumes...

Bulk Commodity Exports graph

So, in the red corner we have falling capex and, to date at least, a weak labour market (job ads have recently picked up, though).

What about in the green corner?

Saving me some brainstorming time, Koukoulas listed what the Aussie economy has got going for it here, namely:

"Job ads up
• House prices up
• Home building approvals up near record highs
• Retail spending strong
• Company profits growth up over 10 per cent
• Government tax revenue stronger than expected
• Business conditions lifting
• ASX near 6 year high
• Exports booming
• Interest rates at record low
• Government demand no longer restrictive
• Aussie dollar low
• Non-residential construction up
• Inflation lifting to upper part of RBA target band"

Kouk had another rundown this morning here after the GDP result.

Lots to be positive about, especially after the AIG services data this morning. Services makes up a huge chunko of the Aussie economy after all.

And indeed share markets did break a 6 year high by the close today.

Tomorrow we'll take a look at what news the RBA brings with its latest Chart Pack.

There's life in the old dog yet.