Description of Graphs for Speech by Glenn Stevens, Deputy Governor

Graph 1: World GDP Growth

The graph has columns showing annual world Gross Domestic Product (GDP) growth from 1978 to 2003 as well as the May Consensus forecast for 2004 and 2005. It also has a line showing the 30-year average for world GDP growth, which is around 3½ per cent. The graph shows that, after growing at around trend last year, world GDP growth is expected to pick up in 2004 to an above-average rate of around 4½ per cent. Growth is expected to slow only slightly in 2005, remaining above 4 per cent.

[End description.]

Back to graph

Graph 2: US Corporate Profits after Tax and Investment

This graph shows both US corporate profits after tax and US business investment as a percentage of US GDP from 1950. Business investment as a percentage of GDP fell from a cyclical high of 12.6 per cent in September 2000 to a low of 10 per cent in March 2003. Since then there has been a solid upturn in business investment. Corporate profits as a percentage of GDP fell to a cyclical low of 5.1 per cent in September 2001, but have now risen to 8.5 per cent. Corporate profits as a percentage of GDP are now at their highest level since the series began.

[End description.]

Back to graph

Graph 3: US Federal Funds Rate

This graph shows the US federal funds rate from 1955 to May 2004. The current fed funds rate is 1.0 per cent, which is the lowest since 1958. The graph also shows expectations for the federal funds rate, based on market yields. This line shows that the market is expecting the federal funds rate to gradually increase to about 4 per cent in early 2006.

[End description.]

Back to graph

Graph 4: Emerging Market Spreads

This graph, starting in 1995, shows the spreads between yields on both Latin American and Asian sovereign bonds and US 10 year government bonds. The Latin American series has a break in November 2001 due to the removal of restructured Argentine debt. The Latin American spread has increased to 445 basis points from its low of 275 basis points in early 2004; however this remains below its long term average and well below the recent high of over 1000 basis points in late 2002. The Asian spread has moved moderately higher to 290 basis points from its low of 157 basis points in July 2003. Asian spreads also remain below their long term average.

[End description.]

Back to graph

Graph 5: US Corporate Spreads

This line graph, starting in 1997, shows the spread between US corporate bonds and US 7 to 10 year government bonds. There are 4 lines on the chart that show US Junk bonds (B bonds), BBB bonds, A bonds and AAA bonds. Junk bonds have the highest spread of the 4 series, with the spread recently widening slightly to 377 basis points. This is well below its long term average. The remaining series show little change over the past year, and remain well below their peak in October 2002.

[End description.]

Back to graph

Graph 6: Cumulative Global Oil Demand Growth

This graph shows the cumulative annual increase in demand for oil from 1997 and includes a projection for 2004. By 2004, China has increased its demand for oil by over 2 million barrels per day compared with 1997; this is roughly equal to the increase in demand for oil from the OECD over the same period.

[End description.]

Back to graph

Graph 7: Oil Price

This graph shows the monthly oil price from 1970 in both real and nominal terms. Both prices have increased significantly in recent months. The nominal oil price is around its highest level on record, however the real price is well below previous peaks, though it is at its highest level since 1990.

[End description.]

Back to graph

Graph 8: Household Consumption Expenditure

This graph shows the year-ended percentage change in household consumption expenditure from the national accounts for Queensland and the rest of Australia from 1989.

It indicates that consumer spending has been particularly strong in Queensland, growing at over 8 per cent through 2003, compared with 5 per cent for the rest of Australia.

[End description.]

Back to graph

Graph 9: Dwelling Investment

This graph shows dwelling investment from the national accounts for Queensland and the rest of Australia from 1990. The two series are indexed to the June quarter 2000 to correspond with the introduction of the New Tax System.

The graph highlights that dwelling investment in Queensland surged to record levels in 2003. Dwelling investment was also strong in the rest of Australia over the year, but it has not exceeded the pre-GST peak in 2000.

[End description.]

Back to graph

Graph 10: Employment Growth

This graph shows year-to-latest-three-months growth in employment for Queensland and the rest of Australia from 1992.

The graph illustrates that employment growth in Queensland has significantly outpaced that in the rest of Australia over the past two years. Over the year to the three months ended April 2004, employment growth in Queensland was 3.2 per cent, compared with 1.6 per cent for the rest of Australia.

[End description.]

Back to graph

Graph 11: Unemployment Rate

This graph presents three-month-ended average unemployment rates for Queensland and the rest of Australia from 1982.

Queensland’s unemployment rate has been higher than that in the rest of Australia for most of the last decade. However, with strong employment growth in Queensland in recent years, the gap between Queensland’s unemployment rate and that in other states has narrowed significantly.

[End description.]

Back to graph

Graph 12: Median House Prices

This graph shows median house prices for Sydney, Melbourne, Brisbane and the Gold Coast from the March quarter 1993 to the March quarter 2004. After rapidly increasing over the past few years, median house prices in each of these cities have fallen in the March quarter 2004. The falls in median house prices are largest in Melbourne and Sydney, with only small falls in Brisbane and the Gold Coast. These data are from Australian Property Monitors.

[End description.]

Back to graph

Graph 13: Consumption, Wealth and Income

This is a 2-panel graph, showing data from 1993. The top panel displays the ratio of household wealth to household disposable income. There has been a clear upward trend in this series for the past decade, largely owing to rising house prices.

The bottom panel shows year-ended growth in nominal household consumption and household disposable income. Consumption growth has consistently outpaced that of income for the past few years, facilitated in part by rising wealth and the capacity of households to collateralise the higher wealth.

[End description.]

Back to graph