Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & 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's 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 & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & '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 Hmmm, one of the world's most popular & widely-read financial publications.

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

Saturday, 6 June 2015

Retail flat (threads and treads)

Retail flat

The ABS released its Retail Trade data this week for the month of April 2015.

The seasonally adjusted result was flat for the month, the first time since all the way back in May last year that retail trade did not increase.

The trend result ticked up by 0.3 per cent.

While this will be cited as "evidence" of a slowing economy, it's only one print - the broader reality is that monthly data does not move up in a straight line, and retail turnover remains up by 4.1 per cent over the past year.

In fact, commentators have been calling a retail stagnation for years yet retail turnover is up by a very robust 13.4 per cent over the past three years from $21,528 million to $24,097 million. 

This continues a long trend, of course.

For all that, it is true that wages growth has slowed, so future strength in consumption is relying on low interest rates at the present time for its fuel.

Some of the sub-indices pointed towards weaker expenditure in department stores, and recreational goods.

State versus state

The New South Wales economy is still cruising, particularly so in Sydney, but things are not so rosy everywhere around Australia, particularly in mining regions.

Threads and treads?

For some reason South Australia's retail trade has teed off on this data series, up by nearly 6 per cent year-on-year, though I haven't come across a serious commentator who believes those numbers yet.

Drilling into the sub-indices shows that South Australia has witnessed an enormous 29 per cent boom in clothing, footwear and personal accessories retail over the past 12 months.

Forgive me for momentarily suspending my disbelief...a slight glitch in the matrix, methinks.

Retail trade appears to be generally fairly solid in the most populous cities, but weaker in resources influenced areas.

Industry groups

Food continues to be rather popular, unsurprisingly, but the biggest driver of retail trade growth over the past year has been household goods, rising on the back of the Sydney property boom.

The clothing and footwear anomaly, driven by South Australia, sticks out like a sore thumb which has been hit by a personal accessory. 

The wrap

A softer result than forecast, but one month of flat figures doesn't tell us all that much, even if it does represent an inauspicious start to the economic data for Q2.

We have already seen that the trade deficit blew out to a record $3.9 billion at the beginning of the second quarter.

Still, a long way to go yet...


Housing Finance data for April next up!