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Speaker 1: Welcome to Firingreed the Week Ahead. I'm Sean Almar and

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Speaker 1: as always I'm joined by economist Stephen Cooculis. You'll find

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Speaker 1: team at the Cook dot com, t h e k

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Speaker 1: o UK dot com and on X using the handle

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Speaker 1: the Kirk Stephen.

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Speaker 2: Good morning, Good morning, a blockbuster week last week, another

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Speaker 2: one coming up this week.

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Speaker 1: Look, I want to talk about this week really, but

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Speaker 1: just very briefly. We had some interesting figure I mean

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Speaker 1: the inflation figures last week. CAPEX figures just in about

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Speaker 1: thirty seconds, wrapped last week up because there's so much

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Speaker 1: going on this week.

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Speaker 2: Monthly inflation headline figure two and a half percent, so

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Speaker 2: bullseye for the RBA there right in the middle of

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Speaker 2: the band, trimmed mean two point eight. So the second

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Speaker 2: consecutive months blow three. So some more evidence of the

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Speaker 2: inflation war has been won. Capex, as they say, crap x.

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Speaker 2: It was a quiet week result, felve point two percent,

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Speaker 2: three quarters in a row. It's been declining and CAPEX

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Speaker 2: and business investment is the stuff that we want to

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Speaker 2: see get productivity going again, and so that was a

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Speaker 2: slightly disappointing result last week.

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Speaker 1: Okay, this week, the big one GDP for the December quarter.

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Speaker 1: And now we always talk about it being backward looking,

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Speaker 1: but there is real value in that.

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Speaker 2: Yes, the GDP figure is sort of the building block,

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Speaker 2: and even though you don't necessarily have it as a

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Speaker 2: guide to future policy settings unless it's really weak or

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Speaker 2: really strong, it is that building block for momentum on

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Speaker 2: the economy. So how did we go in the December quarter?

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Speaker 2: So the numbers that come out on Wednesday, December quarter,

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Speaker 2: and it looks like it's going to be an okay result.

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Speaker 2: We know that sort of consumer spending was up about

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Speaker 2: one percent in real terms in the quarter. Net exports

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Speaker 2: might make a small contribution. Government demands probably going to

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Speaker 2: make a contribution, offset by that capex result a little bit.

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Speaker 2: So all the pluses and minuses when you throw them

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Speaker 2: into your spreadsheet, you get a figure of about zero

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Speaker 2: point seven percent for the quarterly growth lifts the annual

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Speaker 2: figure from point eight to one point four or thereabouts.

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Speaker 2: So not a super strong result, far from it, but

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Speaker 2: just a little bit of respite from you know, the

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Speaker 2: three or four or five consecutive quarters that's been really

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Speaker 2: really weak.

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Speaker 1: What do you think the Reserve Bank will make of that?

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Speaker 2: Look they'll be pleased, and they alluded to it, I

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Speaker 2: guess on the eighteenth of February with their interest rate

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Speaker 2: cut decision. They did note that the economy was showing

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Speaker 2: size of an improvement, particularly the household consumption side of

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Speaker 2: the economy. They did note that the global economy was

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Speaker 2: while it was weak, our export sector is actually keeping

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Speaker 2: its head above water quite nicely, and they did not

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Speaker 2: if that public demand was strong. So that's an important

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Speaker 2: part of bottom line GDP growth as well. So that'd

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Speaker 2: probably say good, you know, we do want the economy

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Speaker 2: to grow. You know, they don't want to kill inflation

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Speaker 2: by killing the economy, so they'll probably say, yeah, that's

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Speaker 2: a good result. It probably yeah, it doesn't unless it's

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Speaker 2: a real outlier up or down won't change the equation

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Speaker 2: for monetary policy settings, which are still a month away

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Speaker 2: from the next RBA meeting.

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Speaker 1: Okay, now, this week also we have some other data,

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Speaker 1: one on retail and household spending and another on building approvals,

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Speaker 1: both very very important parts of the economy. And of

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Speaker 1: course they're January. They're post the GDP data.

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Speaker 2: Yes, and that's why they're important because yes, the December

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Speaker 2: quarter data, these are January. Well, the household spending number

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Speaker 2: which is superseding the retail sales number, so it's retail

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Speaker 2: sales plus a whole bunch of services. A really important

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Speaker 2: guide to how we consumers are feeling, if we believe

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Speaker 2: things like the Westpac card Tracker survey. They look at

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Speaker 2: internal data, and even CBA do a similar thing with

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Speaker 2: their internal data, and of course they're huge, so they

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Speaker 2: know that credit card and eppos transactions very very well.

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Speaker 2: It's probably a soggy result, so probably very little both

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Speaker 2: maybe point one or point two. So perhaps that bring

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Speaker 2: forward of spending with the black Fridays and Christmas and

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Speaker 2: whatever in the December quarter was met with a bit

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Speaker 2: of a pullback in January. We'll see on the building approvals.

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Speaker 2: And I know how much you love building approvals and

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Speaker 2: how ash that you are about the housing construction side,

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Speaker 2: its supply side of housing. To fix this housing problem

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Speaker 2: that we've got. Yeah, we've had ten consecutive months of

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Speaker 2: rising building approvals and trend turns. We're hoping to get

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Speaker 2: an eleventh.

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Speaker 1: From a low level, though, Stephen, from a very low level.

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Speaker 2: Low level, and still about forty eight miles below the

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Speaker 2: one point two million you dwelling targets from the government,

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Speaker 2: but I like a plus sign when it comes to

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Speaker 2: things like to supply. So if we get another plus sign,

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Speaker 2: another plus three or four percent, it'll be another baby

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Speaker 2: step along that very very long march towards getting enough

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Speaker 2: housing supply to sort of its housing price and housing

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Speaker 2: rental problem that we're seeing. So looking for a small

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Speaker 2: increase in building approvals when those numbers come out later

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Speaker 2: in the week as well.

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Speaker 1: What I thought was interesting last week's Center Group came

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Speaker 1: out and said that they're looking to rezone some of

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Speaker 1: the space above their mall. So I know that at

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Speaker 1: Hornsby and Sydney Bell Connon in Canberra. I think they

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Speaker 1: are saying four thousand new apartments above those two sites.

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Speaker 1: It kind of makes sense.

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Speaker 2: It kind of does, and it's sort of a similar

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Speaker 2: thing that's being spoken about about putting up rather than

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Speaker 2: out in terms of the new construction of dwellings and

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Speaker 2: above things like train stations. Cextural and in Adelaide talk

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Speaker 2: about it. So you've got and you layer it with

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Speaker 2: sort of nice quality shops and affordable housing and services

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Speaker 2: like your dentist and doctor and butcher bake accounts and

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Speaker 2: everything there, so that you go down there and get

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Speaker 2: your day to day coffee and all those things done.

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Speaker 2: You can jump on the train and go to work

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Speaker 2: if you don't work nearby, And that's a great idea.

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Speaker 2: So having it some of that thinking where we you know,

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Speaker 2: why we've got all this land and nobody want to

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Speaker 2: live lives out at Wookwark, you know, even though we

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Speaker 2: can build nice houses and they're all good, but there's

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Speaker 2: no train, ansport, is no schools, shops, bill your slap

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Speaker 2: bang in the middle of bell Connon, right next to

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Speaker 2: the Bureau of Statistics, by the way. What a dream place,

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Speaker 2: What a dream location. Imagine being an ABS worker and

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Speaker 2: you could just go there above the Westfield shopping Center,

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Speaker 2: get your lunchtime snack, and roll off to work.

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Speaker 1: And just quickly see what do you make of last

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Speaker 1: month's housing price increases little soggy in the big cities.

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Speaker 2: Yeah, soggy in the big cities. Were just towards the

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Speaker 2: end of the month. I don't know whether it was

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Speaker 2: just seasonal, because this is the seasonal time of the

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Speaker 2: year where activity picks up, and we've had a bit

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Speaker 2: of an increase in auction clearance rates in the last weekends.

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Speaker 2: But that declining prices that we've seen, particularly in Melbourne

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Speaker 2: and to a lesser extent in Sydney, but also Hobart

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Speaker 2: and Darwin might just be stabilizing. The boom cities are

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Speaker 2: still slowing, but that sort of concern about falling house prices,

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Speaker 2: if indeed it was a concern, might just be abating.

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Speaker 2: So those core logic house price and lovers are sort

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Speaker 2: of showing that the deterioration, if we could call it

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Speaker 2: that in house prices that we saw at the end

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Speaker 2: of twenty twenty four are stabilizing.

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Speaker 1: Fantastic, Stephen, enjoy the week.

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Speaker 2: Thanks Sean.

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Speaker 1: That was economist Stephen Coculus, better known as the Kirk.

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Speaker 1: You can find him at the cook dot com and

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Speaker 1: follow him on x using the handle of the Kirk.

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Speaker 1: I'm Seanielmer and this is appearing Greed the week Ahead.