Australian Markets Weekly: Are wages reaching a new low?

An important week for Australia, with a speech by the RBA Governor Tuesday, the release of key investment figures that feed into next week’s GDP, as well as the latest survey of investment intentions for 2015-16.

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An important week for Australia, with a speech by the RBA Governor Tuesday, the release of key investment figures that feed into next week’s GDP, as well as the latest survey of investment intentions for 2015-16.

The special focus this week is on some new data from SEEK that National Australia Bank is partnering with in examining trends in Australia’s labour market in more detail (for SEEK’s commentary on developments in job advertising in October see media release). In the context of the low wages outcomes revealed in the Q3 WPI last week, we note that Average Advertised Wages have begun to increase very modestly, suggesting we may be near the nadir for wages growth, an assertion supported by the declining trend for the number of applications being received for each job advertised on SEEK’s website. Like other Australian data – and trends in the economy in general – the data reveal weakness in advertised wages in Mining, Resources & Energy, Engineering and Construction drove much of the decline in Average Advertised Wages since mid-2012, though these declines appear to have eased recently (especially in Construction, likely reflecting improvements in residential construction and infrastructure work).

This Week

As noted, an important week for Australia. RBA Governor Glenn Stevens is speaking on Tuesday at 8.05pm AEDT at the annual Australian Business Economists forecasting conference on the topic “The Long Run”. NAB anticipates such a broad topic to imply a discussion on productivity, the sustainability of growth and the limits of monetary policy. Assistant Governor (Financial Markets) Guy Debelle is also giving a speech on Wednesday, but with the topic on FX conduct issues, it is unlikely to garner much interest.

The data this week will include the key investment figures that feed into next week’s GDP figures (to be released on Wednesday 2nd December; NAB is expecting GDP to be 0.8% q/q). Investment figures will remain inherently very volatile over the coming quarters because of the unwind in mining investment (particularly LNG projects) and the lumpy nature of this investment.

For full analysis, download report:

• Australian Markets Weekly: 23 November 2015. (PDF,449 KB)

For further FX, Interest rate and Commodities information visit nab.com.au/nabfinancialmarkets

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