Indeed the RBA's central case sees unemployment declining all the way down to 5.3 per cent by 2018. A moderate upward revision to 2015 GDP growth forecasts to 2.5 per cent implies that GDP for the fourth quarter will be around 0.6 per cent, or perhaps a shade lower.
Declines in mining investment from the 2012 peak are expected to continue for the next few years, but with a particularly sharp decline in 2015/16, meaning that "the largest subtraction from GDP is expected to occur in this financial year" (i.e. imminently).
This key point raised by the Reserve Bank echoes what I discussed in a little more detail here last week. After another huge 42 per cent decline in engineering construction activity in the year to September 2015, the great bulk of the drag on growth for Queensland is by now in the rear view mirror.
At the same time, the RBA notes that liquefied natural gas (LNG) exports are "expected to ramp up substantially over the years ahead", thus in part compensating for the decline in resources construction, and eventually serving to act as a boost for the state of Queensland.
Auctions begin again
The auction markets slowly cranked up again in the two largest capital cities this week, albeit on fairly low volumes.
- Sydney 73 per cent
- Melbourne 79 per cent
Investor activity fades
The largest property markets are in a clear state of transition at the moment. APRA's crackdown has successfully stymied the property investor sector, something which needed to happen sooner or later, for a healthy market cannot easily continue to function smoothly when it is comprised of 50 per cent investors (or an even greater share in some sub-regions).
Industry liaison suggests that lenders have been successfully fighting hard in the owner-occupier space, with mortgage rates available from as low as 4 per cent, which is exceptionally cheap. The number of owner-occupier approvals increased by +1.8 per cent in November. while the total value of new loans increased for both investors (+0.7 per cent) and owner-occupiers (+1.7 per cent).
I'm by no means a cheerleader for the livestock slaughter industry (in fact as a vegan I'm rather the opposite...more of a "boo-boy", if anything), but it nevertheless remains a material part of Australian industry, and particularly so in Queensland.
As you can see below, tonnages of red meat production have surged back fairly dramatically since the wet years of 2011 and 2012 when flooding and port closures clobbered beef exports for the first month of those respective calendar years.
Indeed, as I've looked at previously via the International Trade figures, the meat and live exports industry has been one of the standout performers over the past year as Australian producers look to supply expanding Asian markets.
Industry data suggests that there was a significant spike in exports in December, the month being distorted by heavy US trade as tariffs were removed to fill quotas, but activity has reportedly since slowed in January. If the below numbers appear to be on the low side, then this may be because the 500 million or so chickens slaughtered per annum aren't classified as "livestock".
That's about all for today. Have a great week!