The size of the slump in building in NSW is discussed by John Garnaut:

Approvals to build new houses and flats fell more than a
quarter in NSW last financial year, despite the construction industry
elsewhere showing signs of recovery… Surprisingly strong retail sales
and building approvals figures have raised eyebrows this week, as well
as rekindling expectations for future interest rate rises.

Economists expect the figures, along with strong jobs growth and
business investment, will prompt the Reserve to maintain its
“tightening bias,” despite its decision yesterday to leave interest
rates unchanged at 5.5% this month.

In the meantime, the Chinese revaluation and currency regime change has
encouraged capital inflow and Asian equity markets have boomed.
Oil got to US$64.50 but overnight came back to US$61.50. The
US dollar has been stable and the yield on ten-year bonds is
4.29%. Perhaps Greenspan’s “conundrum” is finally being resolved.

Read more on the Henry Thornton website here.

Peter Fray

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