Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 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 better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent 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'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Monday, 27 February 2017

Dodged bullet?

Technical recession averted?

It's been an incredible 100 consecutive quarters since Australia experienced a recession, and it looks as though this remarkable record will just about remain intact.

Today's Business Indicators figures from the Australian Bureau of Statistics (ABS) brought a bit of a mixed bag of news.

Mining profits exploded fully 50 per cent higher in the final quarter of the calendar year to be a rip-snorting 89 per cent higher than they were the March 2016 quarter.

This was mainly driven by prices growth (which feed in nominal GDP) rather than export volumes growth (which form a part of real GDP), so the national accounts will be an unusual beast this time around. 

Mining income also tore more than 22 per cent higher in the quarter to break fresh records.

Gross operating profits across all industries absolutely smoked expectations to be a massive 20.1 per cent higher in the fourth quarter (the market consensus had expected an 8 per cent improvement).

There hasn't been a quarter remotely like it for profits over the past decade-and-half, this remarkable jump being forged on the back of some massive increases in commodity prices. 

Mixed bag

Today's business indicators release wasn't all bullish by any means, with wages contracting in the quarter, although analysts expect to see better things from this metric in 2017. 

Inventories were up by +0.3 per cent, which was lower than the preceding quarter where there had been an apparently involuntary run-up in inventory levels.

But although this will be a drag on GDP growth in Q4 (-0.2 ppts) the result was not nearly as bad as some analysts had feared. 

Overall, the business indicators were perhaps a slight beat on expectations, and some analysts will be marking their GDP forecasts a notch higher for later in the week. 

In all likelihood this means that Australia dodged a technical recession after recording negative growth in the third quarter.

Regardless, whatever happens to real GDP growth, national income is clearly set to lift sharply, while nominal GDP will be maniacally strong for the December quarter.

Australia has done a remarkable job to notch up an unbeaten century in respect of quarters of economic growth.

The challenge now for Oz is whether it can turn an excellent century into a genuine 'Daddy hundred'.

Shot, Explosion, Broken, Bullet