There’s renewed life in the building industry and the trade account has picked up and remains strongly in surplus, according to reports for September from the Australian Bureau of Statistics yesterday.
But the trade and building approvals figures were very solid and suggest a stronger end to the quarter than the start.
But will the retail sales data show a similar recovery? Later today the ABS releases the September retail sales figures today which will be widely watched to see if there is any sign of a rebound from August’s shock 0.6% slide.
The ABS will also give an estimate of the growth (hopefully) in retail sales in volume terms in the third quarter, which will give us an early sighter of the the strength of household consumption in the national accounts and GDP report in a month’s time.
In fact so strong were the building approvals – a solid rise instead of another weak month, with the gains coming in private sector housing and and not apartments – that the Reserve Bank might have to change its view that the sector’s contribution to growth has faded.
In fact it was the best performance for more than six months as building approvals rose 1.5% seasonally adjusted in September, beating market expectations of a 1.0% fall.
Approvals for private sector houses increased by 9,867, or 0.6% in the month, instead of a fall Approvals in the volatile ‘other dwellings’ category, which includes apartment blocks and townhouses, totalled 8,754, or 2.6% higher.
Economists said the 1.5% month on month rise and 0.2% rise for the year to September were vastly better than the 0.4% drop in August and a massive 15.5% fall as approvals for apartments fell.
Economists had been forecasting a 1.0% month-on-month decline and a 2.4% year-on year drop.
While house prices have show some easing in recent weeks, particularly in Sydney and Melbourne, the data showed a jump in approvals in several states. Monthly approvals rose 10.7% in NSW, but fell 2% in Victoria. Queensland approvals fell 17% – Brisbane was weak as the continuing oversupply and lower lending by banks takes a toll.
WA though saw a 27% surge from a low base as the nascent recovery in what was a very depressed market continues. Approvals also rose more than 16% in Tasmania and over 6% in South Australia.
In trend terms the Bureau said approvals rose 1.8% in September which was the 8th monthly rise in a row.They fell 0.4% in the year to September, a big improvement on the 6.5% slide in the 12 months ending August.
And the trade account showing a surplus of $1.7 billion (subject to revision) showed signs of the rise in commodity prices led by iron ore copper and other metals (though the iron ore price has faded in the past couple of weeks).
September’s trade surplus of $1.75 billion was up from a revised $873 million surplus in August, ABS said yesterday.
Economists had expected the surplus to rise to $1.2 billion.
Exports rose 3%, or by $924 million, in September, on a seasonally adjusted basis, driven mainly by an 8% jump in the value of mining exports. Imports were relatively steady, rising by just $52 million during the month.
The combined trade surplus for the quarter seasonally adjusted was an estimated $3.329 billion (or $3.273 billion on a trend basis). For the June quarter the estimated trade surplus was $4.7 billion on a trend basis and $2.87 billion seasonally adjusted.
