More good news from the economy yesterday with a sharp improvement in the trade account in January, and strong car sales for a second month in February.
The news saw the Aussie dollar hit a series of new 2016 highs above 73 US cents, coming as it did a day after the better than expected GDP figures for the December quarter and 2015 which have extinguished most ’interest cut’ claim forecasts from local economists.
In Wednesday’s national accounts household consumption was one of the main drivers of the 0.6% jump in GDP in the 4th quarter and the 3% rise over the year.
Thanks to solid retail sales, spending on communications, media and recreational services and food consumers did more than their bit to boost the economy.
Household consumption was up 2.9% over the year – financed mostly by consumers being confident enough to run down their savings on consumption.
New car sales last year accounted for around 8%-9% of all household consumption – factor in used car sales and petrol and it is a fair whack of spending, even though fuel prices have fallen sharply.
Much of the extra spending was linked to the new housing and real estate booms – and to cars. Car sales were a record in 2015, with a booming 4th quarter.
And this year has started with a bang with sales up 4.8% over January and February, according to car industry figures issued yesterday.
The Federal Chamber of Automotive Industries’ VFACTS report for February showed total car sales jumped 6.7% to 96,443 from the same month in 2015.
Demand for SUVs continued to surge, as they did in 2015, with sales up 15.1% last month from a year earlier, while passenger car sales continue to ease, down 3% in February.
Sales of light commercial vehicles jumped 12.8% for the second straight month of strong gains. Sales of heavy vehicles also jumped 19.9% as companies ordered and took delivery of new units at the start of the new calendar year.
Toyota retained top spot on the sales ladder in February with a market share of 16.8% from Mazda with 10.6%, Hyundai on 8%, Holden on 7.7% and Ford with 56.9%.
Australia’s trade deficit improved in January, thanks to a rise in exports over the month.
The deficit fell to $2.9 billion in January from $3.5 billion in December, thanks to the 1.1% rise in exports and a 1.1% fall in imports as the cost of fuel imports fell 9%, despite the dollar dipping well under 70 US cents in the month.
Exports were boosted by a 15% rise in the “other manufactures” category, but were held back by a 17% fall in metals and a 2% drop in minerals exports, thanks to weak iron ore exports from Western Australia in January. They were down 16% because of a two-day closure of the port at Port Headland due to bad weather.
