07

September 2018

The OZ Economy is Alive and Kicking!

Peter Switzer never fails to impress or amuse me and his latest article is a must read. I have paraphrased it here - while hopefully not breaching any copyright laws...

"Eat my shorts you negative nannies!"

The Oz economy is looking a lot better than expected. Despite some media outlets doing their best to scare people about housing price collapses and mortgage stress, these numbers actually found that the local consumer is alive and kicking and spending!

Here’s a rundown of the good economic news...

  • Annual economic growth rose from 3.2% to 3.4% – the strongest growth rate in almost six years.
  • Over 2017/18, the economy grew by 2.9% – the strongest gain in six years.
  • The biggest contribution to growth came from household consumption with +0.4% followed by government consumption +0.2%. Dwelling investment and net exports both contributed +0.1%
  • Business investment rose by 3.1% in 2017/18 to a record $118 billion.
  • Almost 93% of ASX 200 companies recorded a profit in 2017/18.
  • Over the year to June, sales of our top 200 companies were up 3.2% on a year earlier – the strongest growth in 9½ years.
  • The Australian jobless rate fell to 5.32% in July – a 5½-year low.

There are some negatives, such as falling house prices but let’s put that into perspective. The national home price index fell by 0.3% in the month to be down 2% over the year. This is no surprise as the regulators have been doing their best to hose down the hot housing sector. This isn’t wrist-cutting stuff after such a big boom for so long.

I’d argue that the greatest thing we have to be afraid of is fear itself and what some damn media outlets will do to scare the pants off readers to make sales and attract eyeballs!

To the doomsday merchants out there, I say respectfully: “Eat my shorts!”

Go the Aussie economy! Read the full article here.

Well said Peter. It is very reassuring amidst all the negativity to know that we have a healthy economy.