Here's our summary of key economic events overnight that affect New Zealand, with news there are some significant jitters being felt in a widening range of banks globally as debt maturities for commercial property spook everyone.
But first in the US, the number of people claiming for jobless benefits rose for a second consecutive week to the highest level in eleven weeks. There are now almost 2.2 mln people on these benefits and that is the highest in more than a year. Still these overall levels are low in historical context, and compared to the size of their workforce. We will get an update on that tomorrow when the non-farm payrolls data is released. Analysts are expecting a gain of +180,000.
However, there was a sizable rise in the number of job cuts reported in January. They typically spike in January so it is hard to assess whether this is out of the ordinary. But this year the spike was more than usual, in fact the highest January since 2009. Job cuts in the financial and tech sectors were prominent in this latest data.
But the factory sector might be turning a corner, up. The widely watched ISM factory PMI improved to in January to its 'best' level since October in a sharp and unexpected change. The sector is still contracting although at a much softer pace, as demand moderately improved and output remained stable. The improved bit was that new order levels expanded sharply.
The internationally-benchmarked S&P/Markit PMI version delivered a very similar story for January, but was more positive, suggesting the overall sector is actually now expanding.
In India, their central bank has ordered Paytm to immediately cease trading. The ubiquitous payments app and its related bank have ignored regulator warnings about the risks it has been taking. Paytm is backed by both Japan's Softbank, and China's Ant Group.
As expected, the EU euro-area inflation report for January came in at 2.8%, holding the lower levels it has reported for the past four months. Again it is lower energy costs that is keeping a lid on rising food prices (+5.7%) but they will be encouraged by the 2.0% rate for other goods.
The Bank of England also acknowledged that inflation risks are "more balanced" there when they held their 5.25% policy rate unchanged today in another split decision.
Internationally, there were a wide range of factory PMIs released by S&P/Markit for January and they showed an overall improving trend - in fact this sector is no longer contracting globally, the best it has been since mid 2022. And that supports the recent improvements to future global growth prospects that the IMF released recently and we reported yesterday.
It is also supported by global passenger air travel data for December which was up strong from a year ago. However, compared to pre-pandemic levels it is not quite there yet. Domestic air travel is higher but international travel is not. In large part that is because the Chinese travellers are staying home still.
But the global commercial property market looks like it is just starting a serious downward spiral. Lower valuations are squeezing leveraged owners, many of whom have large maturities imminent. And that is rocking banks. In the past few days banks from Europe (Deutsche), the US (New York Community Bancorp) and Japan (Aozora) have signaled serious consequences from these revaluations. Although it has been long-foreshadowed we may be entering a very rough patch for banks exposed to the sector. About NZ$1 tln is immediately involved.
The peaking of container shipping freight rates may be underway because these rates fell -4% last week, the first fall late November. And this is despite no resolution to either the Red Sea crisis or the Panama drought. Rates from China to Europe mostly fell. And freight rates for bulk cargoes remain modest even from a long 50+ year perspective.
The UST 10yr yield starts today at 3.87% and down -9 bps from this time yesterday as bond markets price in more anticipated Fed rate cuts. The key 2-10 yield curve inversion is deeper at -34 bps. Their 1-5 curve inversion is also deeper, now by -89 bps. And their 3 mth-10yr curve inversion is much deeper at -154 bps. The Australian 10 year bond yield is now at 3.93% and down -6 bps from yesterday in a extended move. The China 10 year bond rate is up +1 bp at 2.45% but still near a new twenty year low. The NZ Government 10 year bond rate is down -4 bps at 4.64%.
Wall Street has opened its Thursday trade up +0.8% on the S&P500 but still off off its record highs. Overnight, European markets were lower in a range that spanned London's -0.2% and Paris's -1.0%. Yesterday Tokyo ended its Thursday session down -0.8%. But Hong Kong rose +0.5% but Shanghai was down another -0.6%. The ASX200 ended its Thursday session down a sharp -1.2% although mostly just cancelling the prior day's rise. But the NZX50 ended up +0.4% with an afternoon rise.
The price of gold will start today up another +US$13/oz from yesterday at just on US$2063/oz.
But oil prices are little-changed at just over US$76.50/bbl in the US while the international Brent price is now just under US$81.50/bbl.
The Kiwi dollar starts today at just on 61.3 USc and -10 bps softer than yesterday. Against the Aussie we are up +30 bps at 93.4 AUc. Against the euro we are a touch softer at 56.5 euro cents. That all means our TWI-5 starts today at 70.3 and unchanged from yesterday.
The bitcoin price starts today softer. It is now at US$42,627 down -2.0% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.2%.
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95 Comments
Economists just make shit up...and it's all Don Brash's fault apparently!
Very true. Sadly this affects the poor or those who cannot hedge against inflation due to having to spend all their income on existing while the purchasing power of their income from wages and salary is constantly being eroded by the inflation rate. Wage and salary increases never keep up with the inflation rate in the medium to long term. This is a wealth transfer that has been in place for decades. Perpetuated by Central Banks always targeting a positive inflation rate that forever disadvantages those who cannot afford to headgear against inflation.
According to Infometrics the minimum wage increases have beat inflation over the past 20 years by a decent margin
But he said, since 2000, inflation had been an average of 2.6% a year, and the minimum wage had lifted by an average of 4.8% a year.
“In fact, if the minimum wage in 2000 ($7.55) was adjusted purely for inflation over the last 24 years, it would be $13.91.
Minimum wage against inflation whose calculation has excluded the cost of housing since
The greatest erosion in life quality in NZ was the rise of house prices, based on land value hyperinflation, and that is not caught in these metrics (albeit rents and building costs are)
Stable prices would be fine but if the Reserve Bank targets 0% inflation they run the risk of overdoing it and tipping into deflation. And deflation is really bad.
If you know the things you need or want to buy will be cheaper in the future then you will delay your spending. Businesses selling stuff see a drop in their revenue and they make up for it by cutting costs, laying off people, and dropping prices to stimulate demand… which further fuels the deflationary cycle sending the economy into a tailspin.
But the banks targeting now is somewhat hit and miss. And why would deflation discourage spending? True some would wait for prices to settle, but with a target of 0% any deflation would be small and soon recover back to a stable level.
I disagree with you statement that 2% is a sweet spot. People will still worry about inflation. why not target -1 to +1?
I agree with the sentiment that inflation is a thief. But it is driven mostly by the banks restraining resources to their own profit, and therein lies the biggest thief.
Price stability and trying to avoid inflation stealing savings value. This is about the people of the country, not the banks or the wealthy. Where systems are in place to undermine peoples efforts to be secure then they don't support basic democratic values.
A big debate that is occurring now is around Tino Rangatirotanga. While some are wrapping it with a racist aspect, I suggest that this is about everyone in society being able to build sufficient wealth to be able to be secure in their life. Maintaining inflation at any level undermines that and steals proportionately more from the lower socio-economic groups than the wealthy. I suggest it is a BS rort from outdated economic theory.
I think you need to be clearer.
It is the government who is supposed to be the creator of money, and who controls the amount of money in circulation, but they have largely abrogated their responsibilities here to the private banks. This has led to a system that only really serves wealthy powerful interests.
This debate is important, but should include discussion on how we can effect change.
So you've bought into the myth?
Are you seriously suggesting people will stop spending if inflation is 0%? Rubbish. Inflation is really only encouraging and promoting debt, and as has already been stated, debt is becoming an out of control situation. Saving is not a problem either, as banks invest the deposits they hold the get a return. This is in effect spending too.
No, not at all. I don't think inflation is good at all. 0% sounds good to me. As you and others have pointed out, most people spend all of what they have just on living and inflation robs it. At the margins, people with excess money (not that many of us) need to do something productive with it or it just decreases in value. Unfortunately in NZ the market is stuffed so they put it into housing leading to problem #1. I'd be in favour of measures to prevent developers artificially constraining supply to solve that one, but how to do that without unfairly restricting freedom to do what you will with your land eludes me.
Clearer??
Governments do not create 'money ' (though they could, with all the inherent problems that would likely occur)...'money' is 'created' by the banks and the oft stated anticipated (interest) margin is 2%.
Without 'growth' (inflation) there is no ability to pay interest ....ipso facto, if you wish to pay interest you must increase the quantity of money.
As we know the whole system requires growth to function....remove growth and you need a new system...one that dosnt use interest.
Any suggestions?
Step back to before the digital age. Governments controlled money, and managed to total amount available. In a democratic society that control was to support and sustain a functioning economy on behalf of the people they represented. But come into the digital age and they've abrogated their responsibilities there, letting the private banks do it. But those banks are just that, private accountable only to their shareholders, and naturally they do it in ways that favours themselves, not the economy as a whole, the people or the country. The banks do not create money without causing problems. Our economy is rife with problems because of that.
Interest paid on money is supposed to be taken from income earned in the use of the funds. Inflation has nothing to do with it.
As we know... Rubbish, that is why I asked the question. Perpetual growth must lead increasingly quickly, to inevitable collapse because it is a finite system. A properly stable system would limit the rate of collapse and may even provide a time to develop the means to stave it off. In the big picture 'stable' must expand beyond money.
"Interest paid on money is supposed to be taken from income earned in the use of the funds. Inflation has nothing to do with it."
Where does the income come from Murray?....there was an amount of money circulating in the economy at the point the decision was made and now there is an amount of money plus the interest.
It may pay to reflect upon what inflation is.
And you may also wish to consider that every dollar is backed by an asset.
You're spouting theory not the reality.
With finite resources (assets) the ever increasing dollars are backed and ever diminishing portion of those resources. This is one example of an argument for stability, not inflation.
The interest comes from profits gained from using the money. It doesn't come from inflation. One view could be that there is an implicit suggestion of growth, but I suggest that is not necessarily the case and could be a perspective of change. Horse and cart to motor vehicles for example. Interest is not about inflation, but about a return on investment and the risk of that investment.
Your assumptions are based on perpetual growth. How does that continue in a finite universe? Where are the limits?
Where are the limits?
What you are realising here is that we have an economic system, that you are right is outdated. Cos its based on the idea that we can sail away over the horizon, find new markets and sell them our goods that they don't have, then they can sell us goods we don't have. That's been the market/capitalist/economic model of the past 2000 years or so. This has enabled increasing wealth while its still happening, for all involved. Increase the amount of willing buyers/willing sellers on both sides of the market and you have economic growth. But suddenly the market becomes much larger than the money supply in it (scarcity of money), so governments have to then issue new monetary notes to ensure the smooth functioning of the economy, hence central banks. By adding in monetary notes, they smooth transaction friction and by signalling they can do this at any time, encourage you to trade now, because tomorrow those notes you currently hold will be worth less. By increasing the number of notes needed to buy things (inflation), but decreasing transaction friction, more transactions can occur. More economic growth, more tax revenue etc etc. Add in growing population and the need for this was paramount.
But what happens when we have reached every market? When there is no more growth to be found? When there are too many people and not enough resources to supply everyone with the security (money) they need as you suggest should be possible? That is the limits to growth, you have just come to realise PDKs point, just gone a different way about it. And we probably hit these limits around 1960-2010ish. Whatever new markets and growth happen now have to come at the expense of something else, either environmental, human rights, all combined with resource depletion. So this economic system is turning more and more into a zero sum game, where there has to be losers in order for there to be winners. Hence we have competition and the inevitable human outcome - war.
Currently the economic system has been hijacked by monetarist policy who decided they could paper over the resource depletion problem, by printing more money and funneling much of it into the hunt for more resources ($7tn in fossil fuel subsidies currently, up $2tn from a few years ago). They gotta do this or there can't be growth, but really its just about trying to maintain the systems we have. So economic theory is currently being forcibly re-written and it won't be anything like we had before.
In summary, inflation is needed for growing economies based on current economic systems, which are hard to change. But it is not needed for shrinking economies, which is kind of what we need to get back to sensible amounts of resource depletion. For that we really need an economic system that rewards deflation. But we don't have that and nobody would vote for it. So we end up having to resort back to war and blaming everyone else for problems we caused.
cheers Blobbles. the only point I would challenge is that I've just come to realise this. Not so. known it for quite a long time now. But getting to debate it is not so often.
I repeat my question - how do we effect change? Your last paragraph is sobering indeed, but I don't disagree.
Yes, I agree you realised it, sorry didn't mean to imply that.
We only really can effect change by getting everyone to realise what PDK is telling us. We have to institute an economic system that pays participants for efficiency of resource use and lower power solutions to problems. Historically the solution has been to power up, throw more energy at it because it has been "free". Now we know its not, then the solutions are to use as some of our remaining energy to get to the next energy systems (weather thats nuclear fusion/fission/renewables) and use as low of a power solutions as possible. Also recognising that every ounce of fossil fuels we use today is a resource unusable for future generations.
One small thing I noticed is a bunch of businesses now giving employees bonuses for cycling/running to work. That's sort of what we need to do first, but on an industrial scale, where governments give businesses tax breaks for being highly efficient with their resource/energy use. But it needs to be worldwide else its a race to the bottom. That requires effective measurement of the resources used and an entirely different system than we have now.
"The interest comes from profits gained from using the money. It doesn't come from inflation"
Is the interest paid/charged 'money'?....if you agree that it must be then it has to come from an expanded money supply..
An expanding money supply is inflation.
"Your assumptions are based on perpetual growth. How does that continue in a finite universe? Where are the limits?"
I assume nothing...it is a statement of fact. How does it continue? obviously it cannot indefinitely....it ends when all confidence in a currency becomes lost..i.e Argentina.
A significant event in the US where the Director of the FBI has reported to a congressional hearing that the Chinese are continuing to prepare for war by setting up to disrupt US infrastructure. During the hearing it was stated by the chairman that there is no economic or intelligence value identified in the reported hacks being discovered. This is simply setting the groundwork to be able to disrupt it. Probably not just the US where this is happening.
https://edition.cnn.com/2024/02/01/politics/wray-china-hacking-analysis…
The fed isn't in favour of early rate cuts. Investors took that as a signal to buy treasuries so bond yields are dropping anyway on renewed hopes of a broken economy. How f**ked up can you get
When bond yields and official int rates come down then commercial property might get the spur it needs.
Self perpetuating cycle
Drury $732,922 Section 455.60m2
"The insanity - no, really now deliberate evil - that is NZ govt (central and local) land use restrictions. All that just for a rather small section, in a land-abundant country"
https://www.realestate.co.nz/42205694/residential/sale/lot-536-waipupuk…
It would be good to know if most of that cost is the land or the services? If it costs $500k to build a speed bump, god knows how much a residential road with kerbs and parking bays and trees and grass and pipes and power and fibre would cost. And then you also need to build some way for those people to get into Auckland, both trains and motorway widening. That alone costs billions. Sprawl is only cheap if the infrastructure costs are socialised.
Ridiculous - yes. But the government does not set new section prices, the land owners do. And the idea that if you could build anywhere (i.e., free up zoning such that there was no zoning) is unproven as a mechanism to reduce land prices. Indeed, as we see all the time in practice, land developers restrict land availability in their new residential subdivisions. In other words, they release new parcels only when the existing parcels are sold at the exorbitant prices.
I haven't looked at the Drury case, but I'd be prepared to bet on the fact that that land developer is doing just that. It is land developers that implement their own land-use restrictions within their land holdings.
What might assist with the lowering of land prices (particularly near centers of employment) is 'taking out' all rural residential zoning (meaning make all rural-residential zones, residential by executive dictate). Typically, LSB owners are the more likely land-releasers. Hope that makes sense :-).
More neoliberal nonsense.
You do realise all that rezoning and development in Drury is costing Auckland Council billions to fund? And putting the city’s financial position under huge pressure.
What precisely could local government do to change that outcome?
No doubt you would say free up more greenfield land for urban development. That ignores both the fact that regardless of zoning much of that land is unsuitable, as well as ignoring the negative externalities.
People like Reddell only talk about one side of the equation - the ‘supposed’ benefits of freeing up lots of greenfield land for housing. They always conveniently leave out the costs and negative externalities.
As HouseMouse has said, look at the cost of Drury infrastructure, and that is in a relatively good location near a train line and motorway. Should the council build train lines and motorways everywhere in case someone wants to build a subdivision there? Wouldn't it be much cheaper to build social housing for those living in a car?
100% HM.
For those who want to hear from actual experts rather than keyboard warrior hot takes and reckons
https://tewaihanga.govt.nz/watch-listen/podcasts/across-the-ditch-choos…
For those who want to hear from actual experts rather than keyboard warrior hot takes and reckons
People with fancy pants education and high-paying salaries who are working for govt organization are more often than not part of the problem.
Jonathan Spear has multiple degrees incl Masters in Law and PhD in history.
Since then, he's been a high-flying bureaucrat.
The retail group which owns the iconic Berlin department store KaDeWe and two other large luxury German shopping malls has declared bankruptcy, the corporation announced in Berlin on Monday.
KaDeWe Group, part of the troubled Signa real estate empire, is 49.9% owned by Signa Retail, an Austrian-based property empire which itself filed for insolvency last year. The other 50.1% is held by the Central Group of Thailand.
KaDeWe Group said "exorbitantly high rents" in Berlin, Hamburg and Munich "make it almost impossible to operate profitably in the long term."
Since the start of the pandemic rent has risen 37%, it said.
"There is no question that the group can have a strong future with normal rents," KaDeWe CEO Michael Peterseim added. Link
Malls are weird aren't they ? Hardly go myself but I get the feeling many people are there for just the free entertainment and for something to do rather than actually buying anything. Bricks and mortar stuff is really dying, so many options to buy online and just get it delivered to your front door. Some clothing like the Levis shorts I buy cannot even be found in NZ and I get them out of the USA. No idea why they are not stocked local, probably too expensive or something.
Like the CRE market there is also an unspoken reason for department stores and shopping malls failing, and that is the high level of retail crime and violent offenders. We are seeing that in NZ as well, thanks to the gangs filming themselves looting for Tik Tok. Like hands up if you really believe Foodstuffs is exiting Flaxmere because of the cost of a building upgrade and not the extreme levels of shoplifting and violent incidents?
Michael Hill is being forced to close stores due to smash and grabs and ram raids. Again, this seems to only be a problem in countries where criminals can act with impunity due to not being prosecuted or incarcerated if you are a certain ethnic group - note that Michael Hill in Australia doesnt have this problem, only in NZ.
In the US you can almost be incarcerated for sneezing. They must have no crime.
But yes I agree the courts are too busy worrying about the poor offender. Really the main aspect of sentencing should be are they going to do it again. If so then may as well keep them locked up.
Only in some places in the US. In others, like California they have made stealing things under $950 a misdemeanor and if arrested they get a fine and released. So retail crime is now an epidemic as criminals are able to just walk into stores and take what they want without anyone stopping them. They're even making Law & Order episodes about it.
Things might be changing, but don't hold your breath
https://www.cnbc.com/2024/01/11/new-york-and-california-make-retail-the…
Massive farmer protests across Europe. Paris almost at a stand still. And yet not a single article on any MSM.
Anyone else find that strange?
Surely if we can have articles about an Elmo tweet.
https://www.stuff.co.nz/culture/350166443/elmo-asked-internet-how-they-…
We can have a brief article on the protests?
Maybe you're not looking in the right places?
It's been front page news on Al Jezzera today's front page headline story:
https://www.aljazeera.com/news/2024/2/1/french-farmers-unions-call-to-e…
I was just having a conversation about that this morning, how no one is covering the farmer protests. Fortunately, we still have X (formerly Twitter). They have now set up at the EU Parliament in Brussels and its getting feisty.
I still dont understand why forcing farmers off their land and shutting down food production is being pursued by Govts worldwide, as the human population is still increasing and needs to be fed, and the Paris Accord specifically stated that no climate change action was to affect the production of food. It is also insane that in a time of inflation, they are adding massive costs to food producers, how are the poor supposed to feed themselves?
Internationally, there were a wide range of factory PMIs released by S&P/Markit for January and they showed an overall improving trend - in fact this sector is no longer contracting globally, the best it has been since mid 2022. And that supports the recent improvements to future global growth prospects that the IMF released recently and we reported yesterday.
Interestingly, the IMF project that China will keep growing more than twice faster than the U.S. in both 2024 and 2025. Link
One of the more interesting things is that the CRE problems seem to be quite localised to cities who have gone extreme socialist with high taxes, and were the epicentre of the 2020 "defund the police" policies. But if you look at the CRE market in places like Florida and Texas they are going gangbusters. Companies are abandoning the crime ridden, drug infested, homeless encampments of places like Seattle, Chicago and San Francisco, and heading for places like Miami and Dallas.
"Like rows of falling dominoes, Aozora Bank, the 16th largest in Japan by market value, saw its shares plunge by 20% on Thursday after reporting a net loss of 28 billion yen ($191 million) for the fiscal year. This was in stark contrast to its earlier projection of a 24 billion yen profit.
Aozora wrote down the value of its non-performing office loans by 58%, including a 63% reduction in Chicago and between 51% and 59% in New York, Washington D.C., Los Angeles, and San Francisco - all of these cities are plagued with violent crime and controlled by radical Democrats."
But just like the GFC, America will export its political problems to banks in the rest of the world. The problem is not global CRE, but the banks who own the debt of CRE in failing cities.
But just like the GFC, America will export its political problems to banks in the rest of the world. The problem is not global CRE, but the banks who own the debt of CRE in failing cities.
Just don't call it a Ponzi. It's a sensitive issue. And more than a few people don't want to believe what others see is as obvious.
I will disagree that it's just another 'America problem'. Nu Zillun, Aussie, China seem to be more reliant on the Property Ponzi than the US. That's a subjective take of course.
The commercial real estate situation is desperate. I do wonder to what extent that massive devaluation in progress will influence residential real estate asset prices to world over.
And then there's the shockwaves associated with Evergrande as well.
I do wonder whether the world is in for another Great Depression.
Just like I never thought I'd see political fascism on the rise in the West during my lifetime, I also never thought I'd see a Great Depression. Yet, these were both events that happened during my parents and grandparents lifetimes.
Not sure why I thought the world had become immune to history repeating.
The commercial real estate situation is desperate. I do wonder to what extent that massive devaluation in progress will influence residential real estate asset prices to world over.
If people would open their eyes for 5 mins and actually think, then they might realize that perhaps all the nonsense they believe like 7-10 year theories is little more than a fantasy.
Japan had 30 years of deflation but no depression. Mind you, some of the smaller towns and cities in Japan look threadbare and have been through something akin to a depression. The Japanese are resilient people though and can tough it out. Our people are weak. They will look for others to blame; take it on the government; and become violent drunks.
...despite no resolution to either the Red Sea crisis...
Another war by a middle eastern Islamist group, what's new?
As an atheist I sort of thought that there was a universal set of humanist values but the older I get the more I realise that relative peace, prosperity, secularism etc. we enjoy owe a lot to the Judeo-Christian traditions inherited by Western countries.
When you are the ruling empire of the time, you don't go starting wars in your own territories, do you?
Almost like the middle east has been manipulated and invaded by the west for decades. 432,000 civilians killed by Americas wars there since 2001. Israel is a problem caused directly by the west, that goes on as a never ending unsolvable conflict.
Religion has very little to do with it, it is just used as a useful tool for propaganda to dehumanise the enemy.
Also the defanging of Christianity from some of its worst influences and behaviours, coupled with society implementing more somewhat actually Christ-like solutions, in our treatment of the poor, orphans and widows equivalent, and reforming some of terrible behaviours of the industrial revolution to be more just.
Commercial property risks are real and huge. Talking from experience, unlike residential properties, the value of commercial properties is mostly calculated as a yield on its rent. As the yield rises together with higher interest rates, the value drops.
Example, a commercial property paying $100k in rent pa, is bought in 2021 with a 5% yield = the buyer paid $2,000,000 . Today (let's assume the rent is the same for argument's sake), the yield has gone up to 9% (commercial loans are more expensive than residential). The same building is worth: $100k rent / 9% yield = $1.111.111. The owner has lost $888,889 or 44% of its value. The bank knows this and is no longer comfortable with the 60% loan it lent on the original $2 million purchase price. The owner is in negative equity, he has to pay much more expensive interest, and the bank wants him to repay about $500,000 to stay roughly within the 60% loan of the new, lower value of the building.
A terrible mess!
Aside from those buildings in failing cities where nobody wants to rent office space and vacancy rates are spiralling, the rest of the CRE market will pick up as global interest rates fall, and cheaper debt refinancing becomes available. In fact, it may even boom as a lot of REITs are currently selling assets and using the funds to pay down debt, so once debt costs reduce they will be very underleveraged, and dividend payouts are going to rocket. Unlike the late 80's/early 90s the AREITs have gone into this cycle with very conservative gearing ratios, and book values are being written down by about 5%. However most of the current asset sales in Australian REITs are only slightly below book values and many are still achieving above book value. The cost of building is also going to impact the supply side going forward, and places like Australia need to accommodate many millions of new workers over the next 10 years.
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