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March 12 2021

 

1. What are we saving for… 

As another $1,400 gets handed to out to >85% of US households, interesting to see how much savings have built up in the US, and across other developed economies. We are all waiting to see how the potential spending boom plays out with inflation expectations.

US data in first 2 charts below, and Aus the third.

2. Business looking good…

Australian firms reported strong business conditions in Feb, and NAB survey also showing the cheer, as a higher share of Aussie firms reported rising forward orders for Feb – which is typically a positive signal for domestic demand growth. Aussie consumers are also back to 2010 confidence levels, and households’ perception of their finances over the year ahead remains solid.

 

3. Booming demand means trying to find supply… 

The current boom conditions are widespread, and we’ve been keeping watch on the impact this is having on global supply chains. A couple of interesting anecdotes rounded up below:

  • U.S. manufacturing expanded at the fastest pace in three years in Feb, as a gauge of materials costs accelerated the most since 2008 amid supply shortages
  • Vaccine manufacturers are said to be facing a global shortage of the raw materials needed to churn out the shots. The warning came from the head of Serum, the world’s largest vaccine maker, and from the WHO’s chief scientist.
  • There’s a seat foam shortage in the US! One anonymous auto executive told Automotive News that this is going to be a bigger problem than the microchip shortage the industry is already dealing with…
  • There’s also a global sand shortage! Apparently sand is the world’s most consumed raw material after water!
  • Our friends across the ditch, NZ, are facing a shortage of anything related to residential building materials – including timber, plywood, concrete (with pricing up +25% over past 4 months) and copper.
  • And good luck planning a reno, here and in NZ. Homeowners may have to wait up to a year to get projects started with stories of property conveyancing lawyers turning away new client referrals, and ‘subbie’s’ (builders, plumbers, electricians) backed up for ~18 months…
  • “Supply constraints” was even put into a chart after the recent US earnings season (chart below)