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The following information is of benefit to turf producer members when considering the current market trends. Usual comparisons are made on household items, dwellings and motor vehicles in regard to the current standing condition of our economy. We have also included some comment on current wage trends.

The key data releases in Australia this week were about confidence and wages. These confirm the trends in the latest Ai Group Australian PMI, PSI and PCI, that suggest a moderate but not especially strong improvement in local sentiment and demand, as we move past the federal election and towards 2014. Indeed, for many of our larger market-based sectors, this last quarter of 2013 seems to be offering a partial recovery at best from an extended period of tough trading conditions (due to factors such as the high dollar, weak local demand, shifting global growth patterns and high local costs), rather than new opportunities for outright growth.

Against this backdrop, the latest data on confidence among businesses (the NAB monthly survey) and consumers (Westpac-MI and Roy Morgan) suggest we are currently experiencing a fairly normal reaction to a federal election, with a sharp lift in confidence immediately after the election, followed by a moderation in economic expectations some time later. This moderation in mood might be setting in earlier now than in the 2000’s, reflecting the weaker state of the economy in general now, compared with the more prosperous, high-growth, pre-GFC period.  Among the surveys that include a confidence indicator ;

· The NAB index of business confidence fell to 5 points in October, from 12 points in September (zero is the dividing line between net pessimism and net optimism in this survey), taking it back to its long term average. Transport, utilities, business and property services remained mildly confident, but wholesalers and retailers got relatively more pessimistic. The NAB business conditions indexremained in net negative territory in October (-4 points), and has done in every month since Q3 of 2012.

· The Westpac-MI index of consumer confidence increased modestly to 110.3 points in November, from 108.3 points in October. This was close to its recent peak in September and above its long-term average of 101.8 points (100 is the dividing line between net pessimism and net optimism in this survey). Westpac economists believe sentiment is being supported by rising house prices and low

interest rates, with another lift in the ‘house price expectations’ index in this month. This seemed to outweigh rising concerns among householders about their employment prospects, with the

‘unemployment expectations’ index rising to 144.7, well above its long-term average of 128.6 points. The indexes for ‘time to buy a major household item’, ‘time to buy a dwelling’ and ‘time to buy a

vehicle’ all increased in November, to be well above their long-term averages. The last of these is somewhat at odds with actual car sales of late, since the number of new automotive vehicles sold in

Australia declined by 0.7% m/m in October to be 3.1% lower than a year ago.

· The weekly Roy Morgan survey of consumer confidence dropped to 120 points in each of the last 3 weeks, down from a post-election high of 124.1 points in mid-September. An increasing minority of householders in this survey now expect ‘bad times’ for the Australian economy over the next 12 months (27%) and over the next 5 years (22%), which is about the same proportion as immediately

prior to the election in August. 40% still expect to be better off financially in 12 months’ time.

The latest data on national wage trends also suggests a slowing, or at best stable, economy in the second half of 2013. In the labour market, wages growth slowed again in Q3, with the wage price index (for total hourly rates of pay excluding bonuses) growing by just 0.5% q/q and 2.7% p.a. This was the weakest quarterly growth rate since Q3 2009 and the slowest annual rate of growth since Q1 2000. It reflects very weak labour demand and a very modest inflation environment; even at these slower rates, implied real wages growth remains positive, at around 0.5% p.a. (see chart 2). Public sector wage rises slowed to 2.6% p.a. (lowest since Q1 2000). Private sector wage growth slowed to 2.7% (lowest since Q1 2010).