New Zealand outranks Australia for first time in 18 years… Capital spending falls further than expected… Look to Auckland's stricter measures, AMP says
Australia slides down global competitiveness ladder
Australia is only just holding on to a spot in the top 20 in global competitiveness rankings with New Zealand overtaking it for the first time in 18 years, according to an article in The Australian.
Australia claimed 18th place in the Swiss-based IMD’s 2015 World Competitiveness Yearbook which ranked 61 countries based on more than 300 business competitiveness criteria, while New Zealand climbed up a few rungs from 20th to 17th place.
The Committee of Economic Development of Australia (CEDA) released the local results highlighting Australia’s concerning drop in economic performance in the last five years.
“The overall result is drawn from rankings for four key areas — economic performance, government efficiency, business efficiency and infrastructure and Australia has slipped significantly in all these areas over the last five years,” CEDA chief executive Stephen Martin said.
“Worsening domestic economic conditions, rising unemployment and lower international investment have been the biggest contributors to the drop in the overall economic performance ranking this year.”
Australia’s drop in the rankings indicates the nation may be falling behind its global competitors at a critical time for its economy.
The US held first place ahead of Hong Kong, Singapore and Switzerland.
Capital spending falls further than expected
According to an article in The Australian, capital spending has fallen 4.4. per cent for the quarter, double the 2.2 per cent forecast from analysts surveyed by Bloomberg.
The Australian dollar fell sharply on the data, shedding almost half a cent to US77.06c by 11:40am (AEST), the article stated.
According to the Australian Bureau of Statistics, total capex fell by 4.4 per cent, seasonally adjusted, to $35.90 billion in the March quarter.
Australian firms are looking at investing much less in the future, further suggesting that a decade long mining-investment boom is coming to an end.
According to a Bloomberg article, companies predicted they would invest A$104 billion ($80 billion) in the year ending June 30, 2016, a 25 percent fall from the estimate a year earlier and the largest decline since at least 1990.
“The capital expenditure outlook deteriorated from already bleak three months ago, to now recessionary,” the article quoted UBS Group AG economist George Tharenou saying from a research report.
“This data is so bad it would worry the Reserve Bank of Australia and now raises the risk they cut rates again.”
Look to New Zealand’s stricter measures, AMP says
Although banks are tightening lending measures for investors, AMP says this may not be enough to cool Sydney’s housing market, according to an article in The Sydney Morning Herald.
AMP head of investment strategy Shane Oliver said steps may have to be taken akin to those New Zealand has imposed on the Auckland housing market.
"New Zealand's approach has been lot more direct and tougher, whereas here it's about having a chat with the banks and expecting changes," Oliver said.
One of the measures that New Zealand has introduced will require investors to provide a 30 per cent down payment to get a mortgage on Auckland property.
"If APRA is right, it should mean house price gains in Sydney should start to moderate but the question is have they done enough?" Oliver said. "There is a lot riding on APRA now."
Australia is only just holding on to a spot in the top 20 in global competitiveness rankings with New Zealand overtaking it for the first time in 18 years, according to an article in The Australian.
Australia claimed 18th place in the Swiss-based IMD’s 2015 World Competitiveness Yearbook which ranked 61 countries based on more than 300 business competitiveness criteria, while New Zealand climbed up a few rungs from 20th to 17th place.
The Committee of Economic Development of Australia (CEDA) released the local results highlighting Australia’s concerning drop in economic performance in the last five years.
“The overall result is drawn from rankings for four key areas — economic performance, government efficiency, business efficiency and infrastructure and Australia has slipped significantly in all these areas over the last five years,” CEDA chief executive Stephen Martin said.
“Worsening domestic economic conditions, rising unemployment and lower international investment have been the biggest contributors to the drop in the overall economic performance ranking this year.”
Australia’s drop in the rankings indicates the nation may be falling behind its global competitors at a critical time for its economy.
The US held first place ahead of Hong Kong, Singapore and Switzerland.
Capital spending falls further than expected
According to an article in The Australian, capital spending has fallen 4.4. per cent for the quarter, double the 2.2 per cent forecast from analysts surveyed by Bloomberg.
The Australian dollar fell sharply on the data, shedding almost half a cent to US77.06c by 11:40am (AEST), the article stated.
According to the Australian Bureau of Statistics, total capex fell by 4.4 per cent, seasonally adjusted, to $35.90 billion in the March quarter.
Australian firms are looking at investing much less in the future, further suggesting that a decade long mining-investment boom is coming to an end.
According to a Bloomberg article, companies predicted they would invest A$104 billion ($80 billion) in the year ending June 30, 2016, a 25 percent fall from the estimate a year earlier and the largest decline since at least 1990.
“The capital expenditure outlook deteriorated from already bleak three months ago, to now recessionary,” the article quoted UBS Group AG economist George Tharenou saying from a research report.
“This data is so bad it would worry the Reserve Bank of Australia and now raises the risk they cut rates again.”
Look to New Zealand’s stricter measures, AMP says
Although banks are tightening lending measures for investors, AMP says this may not be enough to cool Sydney’s housing market, according to an article in The Sydney Morning Herald.
AMP head of investment strategy Shane Oliver said steps may have to be taken akin to those New Zealand has imposed on the Auckland housing market.
"New Zealand's approach has been lot more direct and tougher, whereas here it's about having a chat with the banks and expecting changes," Oliver said.
One of the measures that New Zealand has introduced will require investors to provide a 30 per cent down payment to get a mortgage on Auckland property.
"If APRA is right, it should mean house price gains in Sydney should start to moderate but the question is have they done enough?" Oliver said. "There is a lot riding on APRA now."
