Crikey

Housing finance was mixed, the new retail sales figures showed some sort of “trend” growth of a marginal 0.1%, and business conditions and confidence seem to have steadied, but at low levels, without much optimism though.

The Australian Bureau of Statistics said this morning that in seasonally adjusted terms, the total value of dwelling finance commitments in July (excluding alterations and additions) increased 0.6% with investment housing commitments up 2.3%, but owner occupied housing commitments down 0.1%.

In fact the housing sector remains moribund with no growth at all in the number of commitments to purchase a house; to build or to buy a new house, while there was a 0.1% improvement in the number of people who bought an established house. That growth in the value of dwelling finance commitments was so small as to be inconsequential, especially with owner occupied housing lower.

In fact the number of loans granted to build or buy homes and apartments fell 0.2% from June, when they dropped a revised 3.7%. It was the sixth monthly fall in a row and a sign there’s no life in the domestic economy.

The retail sales trend for July showed a small rise of 0.1%, but there was no seasonal adjustment because of the changes forced on the ABS by the $20 million cut in the ABS’s budget by the Rudd Government’s 2% “efficiency dividend” as part of the budget. The ABS recast the previous three months figures in terms of the new method of sampling and found the trend was an unchanged 0.1% rise in each of those months.

The seasonally adjusted figures will now be published each quarter, and effectively we have gone backwards in the collection of up to date and accurate information from retailing in this country. The small rise came after retail sales were flat in June, as shown under the old, more comprehensive method of collecting data.

Meanwhile ,the latest report on business conditions and confidence from the National Australia Bank showed little change in the latest monthly report.

The NAB said the key message from the Business Survey was “that there has been little improvement in fundamental business conditions and confidence in August.”

But while that might be viewed as gloomy, the NAB said that:

It is somewhat reassuring that the Survey has shown some stabilisation in conditions at recent lower levels – and, in particular, that the rapid deceleration in the growth rate evident in recent surveys has, at least temporarily, paused.

That said, it bears repeating that the Survey readings imply another significant step down from the growth rates reported in last week’s National Accounts.”

There is also evidence in the Survey that business has locked in these lower expectations for the near term. Business expectations for the December quarter are that there will be little improvement in business conditions over the next 3 months.

In the last 6 months, business has continually under-estimated the speed of the slowdown and clearly some stabilisation in outcomes is necessary if business is not to continue to experience unpleasant downside surprises.