Well, yesterday’s data drop has produced mixed views about the health of the economy.
Building approvals for April were weaker than expected, company profits for the March quarter were stronger than expected, while business inventories were weaker and wages and salaries hardly grew in the three months to March.
But house prices slid in May as the surge in auction volumes finally clipped demand and prices.
Looking at building approvals, they were down 5.6% seasonally adjusted in April, and while that is not strong, it was pulled down by a 14.4% drop in approvals for non-private dwellings (that’s apartments, units and townhouses).
Private home approvals were only down 0.3%, which is hardly a movement at all.
While it was the third monthly fall in a row in private dwelling approvals, the backlog remains high by recent standards.
And because of slow processing and bunching up of applications, there’s likely to be a rise in approvals, especially for non -private dwellings as councils process more applications.
In trend terms the fall in total approvals was only 1.6% and there was a rise of 0.5% in private house approvals.
Building approvals dip in April
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Figures on some key economic indicator – business inventories, wages and salaries and corporate profits surprised economists.
Australian company gross operating profits rose 3.1% in the first quarter from the preceding quarter and 10.9% from a year earlier, according to the Australian Bureau of Statistics yesterday.
But that was the fastest growth in corporate profits for more than two years. It was a lot faster than the forecast of a 2% rise.
And in the biggest surprise, the value of inventories, or stocks, held by Australian companies fell 1.7% in the first quarter from the December quarter.
Now a fall in inventories detracts from GDP growth and some economists reckon the impact could be a fall of up to 0.5% for the three months to March.
But because business will have to rebuild those run down stock levels, that means a positive impact on growth in coming quarters.
But the higher company profits will add more to growth than previously thought.
They were up 7.8% from the March quarter of 2013.
Wages growth slowed to a rate of just 0.2% in the quarter and 2.9% for the 12 months.
That’s equal to the inflation rate in the past year, but well below the rate of inflation in the March quarter of 0.6%.
Some economists now think GDP growth will be around 0.6% to 0.8% for the quarter or an annual rate of 2.9% to 3.1%, depending on revisions to previous quarters data.
And monthly property price data showed the biggest fall for more than five years, according to RPData Rismark figures for May.
The figures show that while Sydney dwelling values dropped 1.1% in May, Melbourne suffered the biggest drop of 3.6%. Brisbane saw a fall of 1.7%, there was a 1.8% drop in Adelaide, 0.8% in Perth and 0.6%.
Only two cities saw prices rise – Darwin was up 1% and Canberra was up 0.1%.
