Tuesday, September 30, 2014

Airport Overload: growth slowdown

Three posts in the past week is a bit of a stretch but Cairns Airport did get around to posting their August stats yesterday. These differ slightly from AIA for domestic passengers which seems to be related to transits. I get a slightly better 12 month rolling domestic growth than AIA but the flatter trend has become apparent in this graph from the airport of total passenger growth (domestic + international):

 
The airport reported a 2.2% gain for domestic passengers on the previous year in August on the previous year, a -7.7% decline in international, and a total gain of 0.5%. Most interest in the commentary was the impact of cessation of hostilities between Qantas and Virgin in the domestic capacity war:

Cairns passengers continued to grow despite the airlines reducing seats as part of their efforts to return their operations to profitability.
There was 3% growth on the following international jet flights that operated in both August 2013 and August 2014: Auckland, Guam, Hong Kong, Osaka and Tokyo.

Monday, September 29, 2014

Women & G20

Belated post. The official group photo at Cairns G20 Finance meeting brought some attention for there being only four women among the 50 odd group. Blue ties to the front please:

 
 
However, when you look at the Forbes list of most influential women in the world there were two of the top five women at the G20 finance gabfest:

 
As a financial wonk, apart from the Australian contingent, I would have had to look up any other men in the group photo. Even Jack Someone as Treasury Sec from the USA? Ragu Rajan was otherwise the most prominent male for me with his previous profile as an academic economist, from India now heading up RBI. The third of the four women was also the relevant minister from India.
 
Just saying. Meanwhile the only person in Cairns who reckons trade was booming in the City over the G20 weekend was Deb Hancock from the Cairns Chamber. Ba8 at the Shangri La was going off Deb reckoned.
 
Note: Merkel at #1 of most influential woman sends my head into a bit of a spin. There is not much doubt that Germany is most responsible for what has now turned into Great Depression 2 in Europe. The world would be much better off in that regard if she were not so influential! Perhaps not her fault with no political choice or alternative but to follow teutonic tendencies!

Airport Traffic Comparisons

Cairns Airport still haven't posted their latest traffic numbers for August so for a weekend diversion I had a quick look at data from the Dep't of Infrastructure and Regional Development. This is less timely but provides a long term perspective and comparison between airports.

This is their long term graph for traffic at Cairns Airport:


The two most significant disruptions along the route there are the pilots strike and collapse of Ansett. There are also some different definitions from the airports own data with the revenue passengers here representing paying passengers on scheduled flights and are exclusive of charters.

The Department data also allows a traffic growth comparison between Australian airports for FY14:


The impact of the resources slowdown is pretty obvious, and also Canberra. Note: Williamtown is the Newcastle Airport. International comparison however is a bit sad for Cairns:

 
There is a note from the Department to be wary of large moves off a low base which particularly applies to Sunshine Coast where traffic volume is comparatively negligible. 

Saturday, September 27, 2014

Great moments in financial analysis

Financial commentary on the Reef Casino included in that last post from the AFR report also caught my interest.
A measure of his success will be to more than quadruple earnings within two to three years at the Cairns Reef Casino, which looks likely to be acquired by Aquis in a $270 million deal by November. The casino’s controlling company, the Reef Casino Trust, had earnings before interest, tax, depreciation and amortisation of $14 million in the 2013 financial year and Mr Fung said a result of $20 million this year seems possible.
“I think if we in the next two or three years, if we can bring ourselves an EBITDA of $80 million . . . the chances of us getting it financed, without me ­giving up too much equity, would be very high,” he said.

There seems to be a problem with the numbers here. The $14 million actually relates to the distributable (net) profit for 2013 and not EBITDA. The EBITDA for Reef Casino Trust (RCT) was approximately $19 million in 2013. This was the basis for the fair valuation range by the independent expert in the target statement from RCT which is included in their report. However that is also not the EBITDA for the full Reef Casino corporate structure which includes a management company and responsible entity. Estimated from information in the expert report EBITDA would have been about $22.5 million for 2013.

This report has also been repeated and misrepresented elsewhere to give the impression of strong growth in the current year at Reef Casino. RCT reports a full financial year to December 31. The more recent 1H2014 to June 30 result was actually relatively flat even after adjustment for one-off costs of the takeover and a high roller bad debt.

I presume this misrepresentation was a misunderstanding on the part of the journalist?

Friday, September 26, 2014

Aquis listing in Hong Kong?

A report in the AFR that while the Friendly Fung Family will fund the Reef Casino acquisition they would "tap debt and equity markets to fund the construction of Aquis": Tony Fung eyes Asian markets for Cairns casino capital

Tony Fung hopes to tap Asian equity markets in 2016 to fund the $8 billion construction of a mega casino resort in Cairns, by partially listing his development company Aquis on the Hong Kong stock exchange.
Mr Fung would not say how much cash he would seek to raise in the listing, which would see Aquis compete with giants of the global gambling industry, like the James Packer-backed venture Melco Crown.
However, the 62-year-old financial services veteran said he expected strong support from investors if he could prove himself as a successful operator of a casino.
A measure of his success will be to more than quadruple earnings within two to three years at the Cairns Reef Casino, which looks likely to be acquired by Aquis in a $270 million deal by November. The casino’s controlling company, the Reef Casino Trust, had earnings before interest, tax, depreciation and amortisation of $14 million in the 2013 financial year and Mr Fung said a result of $20 million this year seems possible.
“I think if we in the next two or three years, if we can bring ourselves an EBITDA of $80 million . . . the chances of us getting it financed, without me ­giving up too much equity, would be very high,” he said.
Curious about the 2016 date and timeline there and whether that signals a delay from previous statements if that is to be the source of capital to fund construction? As suggested in a previous post, capital market conditions could be a factor in Aquis funding. Hong Kong listed casino stocks have turned into something of a bloodbath this year which has extended further in recent days.

Melco-Crown is now down over 40% from it's high flying peak earlier in the year: Macau Casino Stocks Slump as CLSA Predicts Revenue Drop; Macau mired in cold streak; & also Trouble is brewing in the world's biggest gambling hub.

The downturn in Macau gaming revenue may be extending into something longer and deeper than initially anticipated so it may take a while for buoyant conditions to return for casino stocks. Monthly data for September from the Macau gaming authority should be due next week. The quarterly data could be more interesting with a breakdown between different games and most particularly the split between VIP baccarat and baccarat. Macau is pretty much all baccarat, not pokies.

Thursday, September 25, 2014

Agricultural commodities also soft

Noted yesterday was a report on recent declines for key agricultural commodities: Agricultural commodity prices are crashing too
The mining commodity price squeeze was making headlines again on Tuesday as iron ore fell to a five-year low and BHP Billiton announced that 700 Bowen Basin coalmining workers would go, but the miners are not alone in feeling the pressure.
The price of wheat, Australia's sixth biggest export, has fallen by about 31 per cent since May, and is at a four-year low. The price of corn, a key industrial food and drink-making raw material, has fallen by 28 per cent since mid August, and is also at four-year lows. The price of sugar has fallen by 25 per cent since mid-year, and soybean prices have fallen by 39 per cent.
This is certainly a sector which will be cheering for a lower $AUD. There was also an update on the sector from ABARE: Agricultural commodities: September quarter 2014. This includes commentary and forecasts for sugar, which is of most significance to FNQ:
Australian raw sugar exports are forecast at 3.3 million tonnes in 2014–15, around 6 per cent higher than in 2013–14. This forecast reflects an expected increase in supplies available for export, resulting from higher production. Based on the forecast higher export volumes and lower world prices, the value of Australian sugar exports is forecast to remain largely unchanged at around $1.4 billion in 2014–15.

 

Wednesday, September 24, 2014

Has Alex de Waal got his currency analysis right?

Alex de Waal from TTNQ was on ABC Far North breakfast radio this morning to discuss tourism and the recent fall in the Australian dollar (AUD). He was questioned by Kier Shorey on Chinese tourism and the currency. I wish I had a recording or transcript to review as in reply Alex seemed to indicate that the Chinese Yuan (CNY) was more stable so it wouldn't have the same flow on effect as from the USA or Europe.

I'm not sure this is valid at least on the currency aspect. There are plenty of charts on various timeframes demonstrating the volatility but for a quick comparison update I downloaded the latest daily currency spreadsheet from the RBA. This is the chart for the USD and CNY v 1AUD for 2014:

 
 
These have generally tracked the same patterns which should be expected as the CNY trades within a band around a rate to the USD set by the People's Bank of China. China did allow the CNY to devalue earlier in the year which as usual caused some hyperventilating in the USA. The CNY has since been allowed to appreciate again relative to the USD but is still below the previous high.
 
I looked through the RBA data on the Trade Weighted Index (TWI) which reached a peak this year on July 23 before commencing descent. This is the relative percentage change for significant currencies relative to the AUD since that date:
 
 
 
The largest fall has been against China. This could be cherry-picking and I can select a different date for the recent decline such as September 5/8 when the cracks really started to open but it wont much change the result. Perhaps Alex meant that Chinese tourism may be less sensitive to the exchange rate?
 
The general tendency over the past decade has been for the CNY to appreciate relative to the USD and it has risen significantly over that time. That period has also coincided with the period of a stronger AUD. I may come back and look at that longer term trend relative to tourism and my previous post: Tourism and the exchange rate.
 
Update: I have been able to review the comments and the comments from Alex do seem to be more related to sensitivity to the exchange rate than volatility of the rate itself. Although perhaps some aspects of the response were confusing on this particularly re the Euro. So I will give the benefit of the doubt and return later to exchange rates and tourism. Meanwhile, Conus has questioned the strength of the relationship: How much does a weaker A$ help tourism?


Tuesday, September 23, 2014

Airport traffic growth undershooting runway

Auckland Airport (AIA) today updated traffic numbers for August which include Cairns Airport. As previously discussed these are presented differently to those directly from the Airport which are yet to be posted for August. The Auckland numbers appear to confirm recent softening growth in domestic traffic. The domestic growth trend had previously been quite robust while international has been weak with negative growth.

 

Following a negative month in June with -2.9% growth from the year before any rebound has been modest with 1.8% growth in July and 1.4% growth in August. Aggregate growth for the last three months is just 0.3% over the previous year. July and August are the peak months of the year. The percentage change in the 12 month rolling totals from AIA have now successively rolled down: May 5.2%; June 4.6%; July 4.2%; August 3.7%.

I will update with graphics when Cairns Airport post their version of the numbers. Meanwhile seat belts fastened and fingers crossed for a soft landing or maybe even a touch-and-go from G20 traffic!

Monday, September 22, 2014

Revisiting the investment clock

An excellent post from Tim Harford worth a read: How to see into the future
This wasn’t because Keynes was a great economic forecaster. His original approach had been predicated on timing the business cycle, moving into and out of different investment classes depending on which way the economy itself was moving. This investment strategy was not a success, and after several years Keynes’s portfolio was almost 20 per cent behind the market as a whole.
See previous post: A treatise on clocks. As far as I can make out the 'Cairns Clock' there has been stuck in about the same position for almost two years now? Enthusiastic promoters of the investment/economic clock should be handled with caution. The sponsored posts on my FB timeline have been filled with property spruikers lately and i'm pretty sure each of them has a clock with a time adjusted to their sales strategy.

Painting by numbers

I haven't posted anything yet on last weeks regional employment data which has been covered by Conus: The good news for jobs continues in Cairns

Pete has also updated and made available the Conus Trend employment and unemployment rate for the Queensland regions. This is particularly valuable in being able to provide a more sound basis of comparison between regions for the notoriously unreliable monthly data from the ABS.

The ABS provide data for the Queensland SA4 regions and also a break this into 'Greater Brisbane' and 'Rest of Qld'. What I have looked at is the Y-o-Y change in the Conus Trend from August 2013 to August 2014. In this period there were 49,300 jobs total created in Qld. 22,900 in Greater Brisbane and 26,400 in Rest of Qld.

Fair enough, but when we look at the SA4 breakdown then 21,100 of those regional jobs (80%) were on the Gold Coast. If one were to take the liberty to rearrange the statistical geography and include both Gold and Sunshine Coasts with Greater Brisbane in 'SEQ' then there would have been no net jobs gain at all over the year outside SEQ.

If we rank the Queensland regions on employment growth this is how it looks:


 
Gold Coast is also the largest region by population here. The validity of the 7.7% growth on the Gold Coast looks a bit of a stretch to me even on the trend numbers. (Note: wouldn't place much relevance there on 'Outback' given the relatively small population and sample size with a geography that covers a huge area of inland Qld including Cape York.)

However, within Greater Brisbane there are also divergences as wide as plus 9.7% employment growth in the Inner City to minus 9.2% in Logan-Beaudesert.

Should be careful here, as Ricardian Ambivalence always used to warn the methodology of the labour force survey is to derive an unemployment rate and employment is a secondary estimate based on further assumptions such as population growth. So the significant point to note is that even with such strong employment growth the unemployment rate on the Gold Coast increased:



This is why some of us keep banging on about participation rates and the need to consider the full range of indicators and not just a selected component. To play with some numbers I have combined the two above to correlate employment growth with the unemployment rate:


I wont pretend that trend line has any significance. Despite that there doesn't appear to be any meaningful correlation between employment growth and the unemployment rates across the regions? Cairns is one of only three to show improvement in both (bottom right quadrant). Fitzroy is particularly interesting stand-out there given the association with resource industries.

Stephen Koukoulas tweeted in response to the recently contentious national stats that there was a danger of a policy mistake if reliability of the data was not improved. The ABS has also been subject to recent funding cuts. I guess we just have to trust that the RBA understand the problems and complexities.

At a regional level it is now Townsville which is angsting hard based on the unemployment stats. I appreciate that Townsville may be soft and the outlook weaker than other regions but suspect there is a danger in being hostage to this employment data, as I think previously happened in Cairns: Townsville jobs disappear amid 'perfect storm' of economic problems

I remain content to be circumspect on all the labour force data currently although recognise that such confused circumstances could correlate with a turning point.

Saturday, September 20, 2014

Cairns #G20 Tweet Award

My favourite tweet so far from the Cairns G20 Finance Ministers comes from Ed Johnson, Sydney bureau chief at Bloomberg News, which impressively promotes the convention centre auditorium:

4h
I hear Cairns is beautiful at this time of year

It may take some beating for my Cairns G20 Tweet Award. So far it would seem that the most prominent tweet topics from the event #G20 are: 1) Vladimir Putin 2) A bearded dragon lizard in the media centre 3) Global taxation.  (Update: Plagiarised by SBS! Dragons and Russians the most talked about G20 guests)

Tuesday, September 16, 2014

Has Stuckey repeated the same tourism fudge?

Tourism Minister Jann Stuckey has released a report card today at the DestinationQ 2014 forum: Report card shows positive tourism growth
Jobs have been created and Queensland’s economy has been buoyed by strong tourism growth over the past three years according to a new report card released at the third DestinationQ forum. Premier Campbell Newman said there were 27,000 new jobs in tourism and the sector had grown by $3.5 billion since the Government promised to grow the industry as one of the four pillars of the economy.
Three years? The numbers here would appear to be same as the PR from Stuckey back in April: Queensland's tourism industry grows to $23 billion which also includes the 27,000 jobs claim. I posted on this at the time and Pete Faulkner dissected the numbers at Conus: The dangers of getting your dates wrong..and tourism data
In other words the actual increase “since the LNP came into Government” should actually be about $1.4bn (not $3.5bn as claimed). Indeed the bulk of that $3.5bn increase ($2.1bn) actually occurred before the LNP took over.
The numbers used related to the two year period for the financial years from June 2011 to June 2013 which includes the period under the previous administration up to March 2012. So if these are the same numbers repeated this report card is now almost 15 months out of date already?

After the initial reference to previous three years the report card PR then goes on to state that these are "key outcomes since the 1st DestinationQ Forum" which was in June 2012. There is even a YouTube video where Stuckey explicitly claims that the $3.5 billion is "since the Newman government". Newman then states that the 27,000 jobs is "since DestinationQ 2012".

There is no reference to any source for this data in the report card. Perhaps the same numbers is just an extraordinary coincidence somehow but it looks very much like Stuckey has just recycled the same discredited fudge?

Update at Conus including revised estimates: LNP repeating debunked tourism data

Friday, September 12, 2014

Gavin does Sums

Gavin King

Spoke to Ergon this morning to find out whether Cairns residents are seeing any savings on their power bills from Labor's axed carbon tax.
Very pleased to hear the average bill in Cairns will go down by about $170 a year with Ergon passing on the savings from the scrapped tax.
Together with a range of reforms to Ergon, including our plan to introduce competition to the regional electricity market, hopefully power bills will start levelling off rather than the massive year on year rises we've seen over the past 5 years or so.



A comment posted in reply:
 

 
My bill shows normal tarrif down 5% off peak tarrif up 2.2% so 2.8% savings overall. So Gavin if average family saving $170 per year, their annual bill must be $6071. Um .... what the .... ????


You can find some answers here which I may update and comment on later: Queensland Competition Authority. The median again is more relevant as used by QCA.
 
 

Thursday, September 11, 2014

The trend is your friend

There is certain to be some confusion again around reporting of the latest unemployment data for August. A seasonally adjusted increase of 121,000 in employment has attracted most attention. The bulk of this was part-time employment and the ABS has indicated that this months sample rotation played a part and contributed 47,000 to part-time employment. This sounds like a very big number just from sample rotation!

Some commentary:

Conus: Aussie jobs surprise; Macrobusiness: Employment goes beserk!, Job numbers greeted with universal scepticism; David Scutt: Lies, Damned Lies and Australia's August LFS

There is also a good graph tweeted by Greg Jericho nicely demonstrating the difference between the volatile monthly seasonal employment data and the trend. The state data is also typically more volatile than the national data with the seasonally adjusted unemployment rate in SA this month falling unrealistically down from 7.2% to 5.9%. The only reasonable approach currently is to bypass the seasonal data and stick with trend as suggested by David Scutt:
Thankfully, helping to save some face at least, the less-volatile-yet-often-overlooked trend series reported that unemployment ticked up to 6.2% from 6.1%, participation to 65.0% from 64.9% while net employment increased by 18.7k to 11.619m. Clearly, if not already the case, the trend figures, rather than the seasonally-adjusted squark, should be the ONLY figures to watch in this release moving forward.
The regional data is out next week but given this volatility and following some changes to the survey methodology introduced last month I think just a cautious watch may be prudent for now.


There is also a twitter commentary roundup from Business Insider: Here Are The Best Reactions To Australia's Wacky Employment Data Today

Wednesday, September 10, 2014

Entsch's Boondoggles

The committee Inquiry into the Development of Northern Australia has last week published a final report. This committee was chaired by the Member for Leichhardt who is widely acknowledged by any sensible person within cooee of Cairns as demonstrating psychologically delusional tendencies at times.

So it wasn't a surprise to see some of his favourite boondoggles for the north feature in the committee report. A tropical institute of sport? I don't even know what "tropical sport" is? The existing Australian Institute of Sport was itself a bad decision and overfunded in my view anyway, and was initially a populist response by Malcolm Fraser to a poor medal outcome at the drug tainted Montreal Olympics.

There is reference in the committee report to appropriate cost benefit analysis to upgrade and extend the infamous Alice Springs to Darwin rail link to support a new link from Mt Isa. I love a good train line but the Alice-Darwin link would never have passed any appropriate analysis.

Re-locating public service functions to the north gets let out for another run. As I think I may have posted previously with centres such as Darwin and Townsville the public sector in the north is already over represented relative to national averages.

Never mind. Who needs analysis or evidence?  Queensland Economy Watch has posted with reference to the insurance proposal of an expanded role for the TIO. The policy response permutations from the Member for Leichhardt on insurance have so far exhibited twists and turns worthy of an Olympic diver, with a succession of impractical magic solutions, only to end in a graceless belly flop.

I agree with the post by Gene Tunny at QEW on the link above re expansion of the TIO and have commented there, despite many I know and perhaps popular support being for a direct gummint insurance office. I will update with a post on insurance but have noted premiums may actually be easing in FNQ. My own body corporate insurance is due this month so will await that first.

Monday, September 8, 2014

Chinese Resident Perceptions of Queensland

Note: this is the result of a survey by Tourism Research Australia of Chinese who are resident in Australia. It is not visitors to Australia from China or the diaspora.

Key findings from the research  include:
  • Queensland is the top destination choice within Australia for 55% of Chinese residents. Australia needs to motivate this segment within the first two or three years of moving to Australia.
  • A key holiday motivation for Chinese living in Australia is to share experiences with their family and friends from China and visit well known landmarks.
  • Chinese residents living in Australia are most often aware of the ‘big three’—referred to as the ‘big rock’, ‘big road’ and ‘big reef’ (Uluru, the Great Ocean Road and the Great Barrier Reef) —and consider these ‘must see’ destinations. However, awareness of what’s on offer beyond these landmarks is limited.
  • Destinations unique to Australia—or remarkably different to China—are desirable to Chinese residents, including:  places associated with fresh air (e.g. rainforests); places that are not crowded; large scale natural wonders; and landmarks not artificially enhanced by humans.
  • Websites and brochures in Chinese language, as well as travel agents specialising in their demographic group, are important to around two in five Chinese residents.
Source: Chinese resident perceptions of Queensland

Thursday, September 4, 2014

Meanwhile in Macau

The ABS today released overseas arrivals and departures for July which includes quite reasonable graphs, tables, and commentary. There is also commentary at Conus: Departures nudging 9 million in past 12 months.

Chinese inbound tourism growth continues to be a dominant theme. However recent trends from Macau are interesting from the perspective of the Aquis proposal. The Macau gaming authority publishes quite good statistics and the latest numbers produced the third consecutive month of negative YoY gaming revenue growth with August down 6.1% on the previous year.

 

Macau casino stocks, including Crown, have subsequently taken quite a hit this week: Macau August Casino Revenue, Stocks Take Another Tumble. The equity market in casino stocks will likely be a factor for Aquis.

The weakness has mostly been attributed to the ongoing corruption crackdown in China and a shakeout in their property market. The critical VIP sector is anecdotally reported to have been hardest hit but will have to wait for the quarterly numbers from Macau on that.

Previous post: The baccarat boom?

'Right said Fred'

The latest International Tourism Survey from TRA was disappointing for FNQ and I will leave analysis of that to Conus: Intl Tourism data is good for Australia but bad for QLD

Nick Dalton at the Cairns Post has reported the response from TTNQ to arrest the decline: Direct Cairns flights touted as industry looks to reverse falling visitor numbers. This also includes comment from Fred Ariel of Raging Thunder:
“Cairns International Airport which registered only 168,000 international arrivals in the 2013-14 year."
Cairns Airport statistics indicate 243,837 arrivals (ex transits) through the international terminal for the year ended June 2014. How is Fred going with that water pipeline project from the PNG Highlands?



ABS international arrivals and departures numbers for July are due out later today.

Thursday, August 28, 2014

A new year for Cairns Airport statistics

Cairns Airport Statistics have now been posted for July and the new financial year has also brought a revamp of the format. Domestic passengers through the international terminal (T1) have now been included with domestic terminal (T2) passengers. Previously they were lumped in with international transits and domestic traffic numbers represented only the domestic terminal.

This change is welcome and more comprehensively represents domestic passengers. However there still appear to be some issues with the series here which has previously been a source of frustration. This is an update of previously posted graphs with a comparison between the old and new stats:


 
Mostly fine although with some divergence particularly around 2009-2010 where the updated domestic data is significantly weaker post GFC. So to more directly compare the two series (new - old) we can graph the difference between the two data series. This should derive domestic passengers through the international terminal:
 
 
Clearly domestic passengers through T1 can't be negative so last August becomes a problem, and have also re-checked my numbers for that month which seem ok unless they were subsequently revised. However , the significant anomaly is the period starting in January 2009 and ending in June 2010.
 
It was previously suggested by the airport that I could unravel the former statistics to derive a comparable series to this new format. I tried this last year and gave up when it produced exactly the above anomaly and so have since just followed the T2 domestic numbers as a continuous reliable series. Perhaps I should feel satisfied that the airport have now replicated my anomaly in their own numbers.
 
Anyway, and assuming the more recent years are valid (ex August 2013), there is a clear trend in declining domestic traffic through T1 which is to be expected. This will have had a small offsetting impact on the domestic growth trend at T2.
 
The relatively soft rebound in July is also confirmed with domestic growth just 2.4% following a negative growth month in June. July is always the busiest month of the year so perhaps there may even be capacity constraints at peak times given strong anecdotal reports for the month?
 
Previous post on the July numbers from Auckland International Airport where the domestic passengers reported appear to include transits: A timely Posting of Cairns Airport stats

Monday, August 25, 2014

Master Builders close the gap

I always look forward to the survey of industry conditions from the Qld Master Builders if only to see by how much they missed their forecast for the quarter. My benchmark here is the residential sector conditions. The record may almost be worthy of the Guinness Book of Records so reliable it has become that it will miss their optimistic forecast for the next quarter. It did so again in June but by a record low of just -9.9 index points. This compares with an average miss of -16.2 for the available survey series since 2010:


The actual estimate of residential conditions for the previous quarter has now risen almost to the 50 index midpoint level. However the forecast for the future quarters have been declining all year now to close the historical gap. Who knows what could happen if this trend continues. I have previously opined that the builders fill in these survey responses together down the pub on a Friday afternoon.