The Australian Economy and Financial Markets Chart Pack February 7
The Australian Economy and Financial Markets Contents Graphs World Economy Australian GDP Growth and Inflation Household Sector Business Sector 7 Credit and Money 9 Factors of Production and Labour Market Regions and Industry Government Commodity Prices Balance of Payments and External Position 7 Interest Rates Share Markets Bond Issuance Exchange Rates 7 Banking Indicators 9
World Economy GDP Growth World Year-ended Major trading partners* GDP Growth China and India Year-ended China World** India - - - - * Weighted using Australian export shares ** PPP-weighted; accounts for per cent of world GDP Sources: ABS; CEIC Data; IMF; RBA; Thomson Reuters Sources: CEIC Data; RBA GDP Growth Advanced Economies Year-ended US Euro area Japan GDP Growth East Asia Year-ended Middle-income* - - High-income** - - - - - - - - Source: Thomson Reuters * Indonesia, Malaysia, Philippines and Thailand; PPP-weighted ** Hong Kong, Singapore, South Korea and Taiwan; PPP-weighted Sources: CEIC Data; IMF; RBA CHART PACK FEBRUARY 7
World Economy Core Inflation* Advanced Economies Year-ended US** Inflation China and India Year-ended Euro area India - Japan - China - - - - * Excluding food and energy, and for the euro area also excluding alcohol and tobacco ** Core price for personal consumption expenditures Source: Thomson Reuters Source: CEIC Data Unemployment Rate Advanced Economies Inflation East Asia Year-ended Euro area Middle-income* US Japan High-income** Source: Thomson Reuters - - * Indonesia, Malaysia, Philippines and Thailand; PPP-weighted ** Hong Kong, Singapore, South Korea and Taiwan; PPP-weighted Sources: CEIC Data; IMF; RBA; Thomson Reuters CHART PACK FEBRUARY 7
World Economy China Activity Indicators Year-ended growth Manufacturing PMI* Industrial production China Residential Property Market Year-ended growth* Floor space sold Fixed asset investment Real retail sales * Diffusion ; average of the official and Caixin Sources: CEIC Data; Markit Economics; RBA Total social financing flows** China Financing* Share of GDP Fiscal balance Expenditure Revenue - Prices Real estate development investment** - * For sales and investment, a three-month moving average of the seasonally adjusted series is used to calculate growth ** Investment by developers and other construction companies in the development of residential property, includes land purchases Sources: CEIC Data; RBA China Output Indicators 7 average = Electricity generation Cement Balance Crude steel Plate glass - * Seasonally adjusted by RBA ** Upper bound estimate adjusting for impact of local government bond issuance to pay off debt previously included in TSF Sources: CEIC Data; RBA Sources: CEIC Data; RBA CHART PACK FEBRUARY 7
Australian GDP Growth and Inflation GDP Growth Year-ended Consumer Price Inflation* Year-ended Quarterly - - 99 Source: ABS - Quarterly (seasonally adjusted) - 99 * Excluding interest charges prior to the September quarter 99 and adjusted for the tax changes of 999 Underlying Inflation* Weighted median Trimmed mean Tradable and Non-tradable Inflation* Tradables** Quarterly (seasonally adjusted) Non-tradables*** Year-ended CPI excl volatile items 99 * Excluding interest charges prior to the September quarter 99 and adjusted for the tax changes of 999 - - 99 * Excludes tobacco; adjusted for the tax changes of 999 ** Excludes volatile items (fruit, vegetables & automotive fuel) *** Excludes interest charges prior to the September quarter 99, and deposit & loan facilities prior to the September quarter CHART PACK FEBRUARY 7
Household Sector Retail Sales Growth Values (year-ended*) Household Income and Consumption* Real year-ended growth Consumption Volumes (year-ended) Disposable income Saving ratio Volumes (quarterly) - * Percentage change over year to latest three months Source: ABS - - - 99 99 * Household sector includes unincorporated enterprises; disposable income is after tax and interest payments; income level smoothed with a two-quarter moving average between March quarter and March quarter ; saving ratio is net of depreciation Private Residential Building Approvals Monthly Consumer Sentiment* Average since 9 = Total Detached houses Higher-density housing 99 99 Source: ABS 7 7 9 7 * Average of the ANZ-Roy Morgan and Westpac-Melbourne Institute consumer sentiment measure of respondents perceptions of their personal finances relative to the previous year; ANZ-Roy Morgan rescaled to have the same average as the Westpac-Melbourne Institute since 99 Sources: ANZ-Roy Morgan; RBA; Westpac and Melbourne Institute CHART PACK FEBRUARY 7
Household Sector Household Finances Per cent of household disposable income* Debt Interest paid** Household Wealth and Liabilities* Per cent of annual household disposable income 7 Net wealth Dwellings Financial assets 7 Liabilities - - 99 99 * Disposable income is after tax and before the deduction of interest payments ** Excludes unincorporated enterprises Housing Prices Year-ended growth, seasonally adjusted ABS* CoreLogic** APM*** Residex* - 9 7 * ABS is a quarterly stratified median price ; Residex is a quarterly repeat sales price ** Monthly hedonic price ; series breaks occurred in April and May due to changes in methods used to calculate the *** Monthly stratified median price Sources: ABS; APM; CoreLogic; RBA; Residex - 99 * Disposable income is after tax and before the deduction of interest payments Investors** * Excludes refinancing ** Includes refinancing Housing Loan Approvals Total Owner-occupiers* CHART PACK FEBRUARY 7
Business Sector Private Non-financial Corporation Profits* Share of nominal GDP Non-mining ppt - NAB Business Survey Business conditions* ppt - - - Mining ppt Business confidence* ppt - - - - * Gross operating profits; inventory valuation adjusted Capacity utilisation 7 Business credit Per cent of nominal GDP Business Finances Interest paid* Per cent of profits** 7 7 7 Average since 99 7 7 7 7 99 99 * Net balance; deviation from average since 99 Sources: NAB; RBA 9 9 * Interest on intermediated debt from Australian-domiciled financial institutions ** Profits are private non-financial gross operating surplus (adjusted for privatisations) and gross mixed income Sources: ABS; APRA; RBA CHART PACK FEBRUARY 7 7
Business Sector Business Investment* Share of nominal GDP Capital Expenditure Mining and Non-mining* Nominal, financial year, log scale Mining Non-mining 99 99 * Adjusted for second-hand asset transfers between the private and other sectors Source: ABS 99 7 99 7 * Sample of firms' spending plans; dots represent the survey's most recent estimates for /7 adjusted for historical realised spending Business Investment Components* Share of nominal GDP Private Non-residential Building Approvals Per cent of nominal GDP Machinery and equipment Buildings Engineering 99 99 * Adjusted for second-hand asset transfers between the private and other sectors Source: ABS 99 99 Source: ABS CHART PACK FEBRUARY 7
Credit and Money Credit and Broad Money Growth Year-ended ratio Credit* Ratio to nominal GDP ratio Broad money.... Credit.. 99 Sources: ABS; APRA; RBA.. 99 99 * Not adjusted for breaks Sources: ABS; APRA; RBA Monetary Aggregates Growth Year-ended Credit Growth by Sector Year-ended M Housing Currency Business Personal 99 Sources: APRA; RBA - Sources: ABS; APRA; RBA - CHART PACK FEBRUARY 7 9
Factors of Production and Labour Market Factors of Production Annual growth Net capital stock* Wage Price Index Growth Private sector Year-ended Public sector.. Working-age population.. Quarterly.. 79 / / 9 / 9 97 / 9 / 9 / / * Excluding livestock & orchards, dwellings and ownership transfer costs Source: 9 ABS 9 Capital Ratios* 979/ = Capital-labour ratio Unit Labour Costs Growth Non-farm, year-ended Unit labour costs Capital-output ratio 79 / / 9 / 9 97 / 9 / 9 / / * Capital stock excludes livestock & orchards, dwellings and ownership transfer costs - Labour productivity per hour - 99 Average earnings per hour CHART PACK FEBRUARY 7
Factors of Production and Labour Market Employment and Participation Rates Participation rate Employment and Hours Worked* average = Employment Total hours worked Employment to working-age population 99 Source: ABS Average hours worked 9 * Smoothed lines are -period Henderson trends 9 Labour Market Underemployment rate*. Job Vacancies and Advertisements Per cent of labour force Advertisements (ANZ survey).. Vacancies* (ABS survey). Unemployment rate.. * Full-time workers on reduced hours for economic reasons and part-time workers who would like, and are available, to work more hours Source: ABS. * This survey was suspended between May and November 9 Sources: ABS; ANZ. CHART PACK FEBRUARY 7
Regions and Industry State Share of Output* New South Wales Victoria Queensland Western Australia South Australia Tasmania 9 / 9 9 / 9 / / / / - State Final Demand Year-ended growth New South Wales Western Australia Queensland Victoria - * Nominal Source: ABS South Australia 7 New South Wales State Unemployment Rates Trend South Australia Tasmania 7 - - Tasmania* - - 99 * Adjusted for the purchase and sale of ferries in Source: ABS Victoria Queensland Source: ABS Western Australia CHART PACK FEBRUARY 7
Regions and Industry Manufacturing Industry Share of Output* Retail and wholesale trade Financial and insurance services Construction Other business services** Mining Agriculture 9 / 9 9 / 9 / / / / * Nominal gross value added ** Includes: information media and telecommunications; rental, hiring and real estate services; professional, scientific and technical services; administrative and support services Source: ABS Financial and insurance services Other business services** Industry Share of Business Investment* Agriculture Manufacturing Retail and wholesale trade Mining Construction 9 / 9 9 / 9 / / / / * Nominal ** Includes: information media and telecommunications; rental, hiring and real estate services; professional, scientific and technical services; administrative and support services Source: ABS Employment Growth by Industry Cumulative change since February Household services Retail and wholesale trade Public administration Business services Construction Mining - Other* Manufacturing * Includes agriculture, forestry & fishing; transport, postal & warehousing; and electricity, gas, water & waste services Source: ABS - CHART PACK FEBRUARY 7
Government Australian Government Budget Balance* Per cent of nominal GDP State Budget Balances* Per cent of nominal GDP.... - -.. - - - - -. -. - - -. -. - - / 9 / 9 9 / 99 / / 9 / * Underlying cash balance; /7 MYEFO Source: Australian Treasury -. -. / 9 / 9 9 / 9 / 7 / / * Underlying cash balance Source: ABS Public Construction Work Done Per cent of nominal GDP Total Non-financial Public Sector Net Debt Per cent of nominal GDP Non-financial public sector Australian Government Engineering Building 99 99 Source: ABS State and local general governments - - 9 / 9 99 / / 9 / / Source: Australian Treasury CHART PACK FEBRUARY 7
Commodity Prices RBA Index of Commodity Prices SDR, / average =, log scale Base Metals, Rural and Oil Prices Weekly Rural* Brent oil US$/b 7 7 7 7 Base metals* 97 99 997 7 7 Source: RBA 9 7 9 7 * RBA Index of Commodity Prices sub-indices; SDR terms; 7 average = Sources: Bloomberg; RBA US$/t Iron ore (LHS) Bulk Commodity Prices Free on board basis Thermal coal (LHS) Coking coal (RHS) US$/t Terms of Trade* / average =, log scale Average Australian export price Spot price* 7 7 7 7 * Iron ore fines, Newcastle thermal coal and premium hard coking coal Sources: ABS; Bloomberg; IHS; RBA 9 97 9 * Annual data are used prior to 9 CHART PACK FEBRUARY 7
Balance of Payments and External Position Export Volumes Quarterly, / prices, log scale Mt Bulk Commodity Exports Quarterly Iron ore Coal Mt Resources Services Rural 7 Manufacturing 7 Import Volumes Quarterly, / prices, log scale Exports by Destination Annual, share of total values Source: Consumption Services 9 ABS Intermediate Capital 9 China Japan EU - 7 South Korea India US 7 Source: ABS CHART PACK FEBRUARY 7
Balance of Payments and External Position Trade balance Current Account Balance Per cent of nominal GDP Net income balance Net Capital Inflow* Per cent of nominal GDP Debt - - Total - - Current account balance -9-9 99 99 Source: ABS Equity - - - - * values exclude the December quarter Source: ABS Net Foreign Liabilities By type, per cent of nominal GDP Total External Position Composition after hedging, quarterly* Gross foreign liabilities Gross foreign assets Foreign currency Australian dollar Long-term debt* Short-term debt* Equity - - * Short-term includes debt with residual maturity of one year or less; long-term includes all other debt Source: ABS * Hedge ratios inferred from ABS Foreign Currency Exposure surveys CHART PACK FEBRUARY 7 7
Interest Rates Australian Cash Rate and 9-day Bill Yield 9-day bill yield US Policy Interest Rates G Cash rate Euro area* 7 Sources: AFMAData; RBA Japan - - 7 * Main refinancing rate until the introduction of -year LTROs in December ; deposit facility rate thereafter Source: Central banks Australian Cash Rate Nominal Policy Interest Rates Selected Advanced Economies NZ UK - Real cash rate* - 997 7 7 * Calculated using average of year-ended weighted median inflation and year-ended trimmed mean inflation Sweden Canada Switzerland* - - 7 * Policy rate is the midpoint of the -month LIBOR target band Source: Central banks CHART PACK FEBRUARY 7
Interest Rates Interest Rates China -year benchmark lending -year Australian Government Bond Yield 7 7 -year benchmark deposit 7-day repo (month average) 7 Sources: CEIC Data; RBA 9 7 Source: RBA Policy Interest Rates Emerging Markets Indonesia* Brazil Russia* -year Government Bond Yields US 9 Thailand India Malaysia South Korea 7 7 South Africa Mexico 7 7 * Breaks in series indicate changes in the official policy rates for Russia (September ) and Indonesia (August ) Source: Central banks Germany Japan - - 9 7 Source: Thomson Reuters CHART PACK FEBRUARY 7 9
Interest Rates ppts Spread between Australian -year Bond Yield and the Cash Rate ppts Australian Corporate Bond Yields* A rated BBB rated AA rated Swap - - - - - - 99 997 7 7 Source: RBA 9 7 * Swap rates are for -year maturity; corporate bond yields are a weighted average of senior bonds with remaining maturities of to years, including financial and non-financial corporations Sources: Bloomberg; RBA; UBS AG, Australia Branch bps Differential between Australian and US -year Government Bond Yields bps bps Australian Corporate Bond Spreads* Spread over government yields BBB rated bps A rated AA rated Swap - - 99 997 7 7 Sources: Bloomberg; RBA 9 7 * Swap spreads are for -year maturity; corporate bond spreads are a weighted average of senior bonds with remaining maturities of to years, including financial and non-financial corporations Sources: Bloomberg; RBA; UBS AG, Australia Branch CHART PACK FEBRUARY 7
Interest Rates US Corporate Bond Yields - years Emerging Market Bond Yields US dollar-denominated, blended yield 9 BBB corporates* 9 Europe Latin America AA corporates* Asia -year swap rate 9 7 * Includes financials and non-financials Sources: Bank of America Merrill Lynch; Bloomberg; Thomson Reuters 997 9 7 Sources: Bloomberg; RBA; Thomson Reuters bps US Corporate Bond Spreads To US government bonds, - years bps bps Emerging Market Bond Spreads To US government bonds, duration-matched bps 7 BBB corporates* 7 Europe Latin America AA corporates* 9 9 -year swap - - 9 7 * Includes financials and non-financials Sources: Bank of America Merrill Lynch; Bloomberg Asia 997 9 7 Sources: Bloomberg; RBA; Thomson Reuters CHART PACK FEBRUARY 7
Interest Rates Australian Housing Lending Rates Average interest rate on variable-rate loans Banks indicator rate on new owner-occupier loans Actual rate on outstanding loans Australian Fixed Interest Rates -year maturity Small business Cash rate Swap rate Housing* 997 7 7 Sources: ABS; APRA; Perpetual; RBA 997 7 7 * Available to owner-occupiers Sources: Banks websites; Bloomberg; Canstar Cannex; RBA Australian Small Business Interest Rates Weighted-average outstanding variable rate** Overdraft other security* Australian Business Lending Rates* Average interest rate on outstanding lending Small business Cash rate Term loan residential security* 997 7 7 * Indicator rates ** RBA estimate; including risk margins Sources: APRA; Canstar Cannex; RBA Large business * RBA estimates Sources: APRA; RBA CHART PACK FEBRUARY 7
Share Markets Australian and World Share Price Indices Log scale, end December 99 = S&P Advanced Economies Share Price Indices Log scale, end December 99 = Euro area US UK ASX MSCI World 997 9 7 Sources: Bloomberg; MSCI; RBA Japan 997 9 7 Sources: Bloomberg; RBA Australian Share Price Indices* Log scale, end December 99 = Resources Emerging Markets Share Price Indices Log scale, end December 99 = Emerging Europe Latin America Financials All other sectors World China Emerging Asia 997 9 7 * ASX companies Sources: Bloomberg; RBA 997 9 7 Sources: Bloomberg; MSCI; RBA CHART PACK FEBRUARY 7
Share Markets ratio Forward PE Ratios ratio Forecast Earnings per Share MSCI Australia MSCI World excluding Australia /9 7/ / / /7 ASX /7 / / / / / / 9/ 9 7 Sources: Bloomberg; MSCI; Thomson Reuters 7 Source: Thomson Reuters Dividend Yields Australian Net Equity Raisings* Non-financial corporations Financials** ASX MSCI World excluding Australia 997 9 7 Sources: Bloomberg; MSCI; Thomson Reuters - * All listed companies ** Includes banks and non-bank financials Sources: ASX; RBA - CHART PACK FEBRUARY 7
Bond Issuance Bonds on Issue in Australia Total Non-government Bonds on Issue All currency denominations Non-government** Financials Non-financial corporations Australian government* State governments 99 99 * Excludes bonds purchased by the Australian Government ** Excludes ADIs self-securitisations, includes government-guaranteed bonds Sources: ABS; AOFM; RBA; State Treasury Corporations Asset-backed securities Non-residents* 99 99 * Australian dollar-denominated bonds only Non-government Bond Issuance Gross issuance Domestic issuers* Non-resident issuers** Australia Non-government Bonds on Issue in Australia Financials Offshore * Excludes ADIs self-securitisations ** Offshore non-resident issuance includes Australian dollar-denominated bonds only Source: RBA Asset-backed securities* Non-financial corporations Non-residents 99 99 * Excludes ADIs self-securitisations CHART PACK FEBRUARY 7
Bond Issuance US and Euro Area Corporate Bond Issuance* US Financials Non-financials Gross issuance US US US Emerging Market Corporate Bond Issuance* Gross issuance China Foreign currency-denominated Local currency-denominated US US Euro area US US Other US 7 * March quarter-to-date Sources: Dealogic; RBA 7 * March quarter-to-date Sources: Dealogic; RBA CHART PACK FEBRUARY 7
Exchange Rates Australian Dollar Trade-weighted Index* A Official Reserve Assets A Real Gross 7 7 yen Yen per A$ (LHS) Australian Dollar Nominal 97 99 999 7 * May 97 = for nominal; real ed to equate post-float averages; latest observations for real TWI are estimates ; Thomson Reuters; WM/Reuters US$ per A$ (RHS) Euro per A$* (RHS) US$, euro... A - A - - RBA net purchases of foreign exchange** Net* RBA foreign exchange market intervention transactions*** A - 997 9 7 * Excludes foreign exchange swaps ** Includes market, government and other outright transactions, excludes swap deliveries *** Data up to June ; a positive value indicates a purchase of foreign exchange, while a negative value indicates a sale of foreign exchange Source: RBA - A -. 97 99 999 7 * ECU per A$ until December 99 Sources: Thomson Reuters; WM/Reuters CHART PACK FEBRUARY 7 7
Exchange Rates yen 7 9 Yen per US$ (LHS) US Dollar US$ per euro* (RHS, inverted scale) US$.9..7...9 9 99 99 7 * US$ per ECU until December 99 Sources: Bloomberg; Eurostat Selected Asian Currencies against the US Dollar January = Singapore South Korea Thailand Malaysia India Indonesia 9 7 Source: Bloomberg G Nominal Trade-weighted Indices 999 average = US dollar Japanese yen Chinese Renminbi Nominal effective exchange rate (LHS, average = ) yuan.. 7. 9 7. 9 9 7 Yuan per US$ (RHS, inverted scale).. Euro 9 7 Sources: BIS; Bloomberg; Board of Governors of the Federal Reserve System 9. 9 7 Sources: BIS; Bloomberg; RBA CHART PACK FEBRUARY 7
Banking Indicators Australian Bank Profits Net profit after tax Bad and doubtful debts charge Major banks Major banks Australian Bank Profitability Return on shareholders' equity after tax and minority interests Majors Other Australian-owned banksother Australian-owned banks Other Australian-owned banks... Foreign-owned banks Foreign-owned banks. - - 99 99 * Fiscal years from onwards; prior data are as reported in banks financial statements. Sources: APRA; Banks' annual reports; RBA.... Major Banks Net Interest Margin* Domestic, half-yearly -. -... Sources: APRA; RBA..... * From data are on an IFRS basis; prior years are on AGAAP basis; excludes St George Bank and Bankwest prior to the first half of 9 Sources: Banks Financial Reports; RBA. CHART PACK FEBRUARY 7 9
Banking Indicators Banks Non-performing Assets Consolidated global operations, share of on-balance sheet assets Banks Non-performing Assets Domestic books Share of all loans Share of loans by type* Total* Business** () 99 99 Impaired * Includes assets 9+ days past due that are well secured Source: APRA Capital Ratios* Consolidated global operations of locally incorporated ADIs Total Banks Tier Other ADIs Credit unions Building societies Total Personal () Housing () * Each category s share of total domestic lending at September is shown in parentheses ** Includes lending to financial businesses, bills, debt securities and other non-household loans Sources: APRA; RBA Funding Composition of Banks in Australia* Share of total funding Domestic deposits Short-term debt** Common Equity Tier Tier Long-term debt Equity 99 99 * Per cent of risk-weighted assets; break in March due to the introduction of Basel II for most ADIs; break in March due to the introduction of Basel III for all ADIs Source: APRA Securitisation 7 * Adjusted for movements in foreign exchange rates; tenor of debt is estimated on a residual maturity basis ** Includes deposits and intragroup funding from non-residents Sources: APRA; RBA; Standard & Poor s CHART PACK FEBRUARY 7