Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Saturday, 24 December 2016

Australia added +102,000 manufacturing jobs this year (& nobody even noticed)

Manufacturing rebounds

Everyone knows that manufacturing is doomed in Australia.

And everybody is certain that the Holden and Ford closure signal the end of the road for manufacturing employment too. 

Australia doesn't make stuff, it only sells iron ore to China.

We all are sure of it, because we've read it on doom and gloom blog sites the interweb!

But wait there just a moment...

Recall that on 1 April I noted that AIG's Performance of Manufacturing Index (PMI) gauge had soared to 58.1, the highest reading in twelve years.

A figure of above 50 denotes expansion, so 58.1 really is quite a huge reading. 

Believe it or not, this was not an April Fool's joke! 

Still even today the gauge is comfortably in expansion territory at 54.2.

What gives?

The reason for these contradictory messages is that while manufacturing has obviously been in a long, sweeping, structural decline over the last three decades, the lower dollar has finally encouraged a rebound since the last quarter of 2015.

In fact, manufacturing was by far and way and the biggest contributor to employment growth in the year to November, adding way more jobs than the remainder of the economy combined at +102,000.

Better still, more than three quarters of these were full time positions at +78,000.

The odd thing is that, as far as I can tell, nobody even noticed, because by the time the figures were reported most people were well esconced in Ryan's Bar (or their home city's equivalent) celebrating the silly season.

Where were these manufacturing jobs? 

Mainly in Greater Melbourne and Greater Sydney, as most new jobs seem to be these days.

Education and training was another winner this year, adding +50,000 jobs. 

Even the mining sector was resurrected somewhat by the commodity price rebound in 2016, posting an additional +12,000 persons employed over the year to November.

Work to be done

As you can see in the chart above, retail trade struggled badly in 2016, reversing most of the good work done in 2015. 

And indeed, it was a poor year for several of the other services industries include finance and insurance, and professional, scientific and technical services, resulting in much slower headline employment growth over the year. 

Clearly there is much more work to be done in 2017 if the national unemployment rate is going to get down to anywhere near 5 per cent, a level that Sydney achieved some time ago already.