A new two-year low for residential building approvals, floundering non-residential approvals and another fall in housing prices and painted a dreary backdrop for Tuesday’s monetary policy meeting.
The meeting, held by the board of the Reserve Bank of Australia (RBA) in Sydney, was probably all over bar the shouting by the time the Australian Bureau of Statistics (ABS) released the data.
And the RBA would have needed no reminding that the domestic economy’s traditional driver, the building industry, was stalling.
The seasonally adjusted figures showed the number of residential approvals fell by 3.5 per cent in June to 12,069, its lowest since June 2009, from 12,513 in May. The value of non-residential construction approved – shops, hotels, office buildings and the like – rose by 1.3 per cent in June, to $2.029 billion, from $2.003 billion in May.
It was a tiny bounce after much bigger falls in the preceding two months.
Combined with the fall in the residential component, which worked out to be 4.1 per cent in dollar terms, the total value of construction approved in June was $5.583 billion, a 2.2 per cent fall from May’s $5.708 billion.
And it means that by June the value of approvals was running at a level $353 million below the monthly average for 2010.
Other figures from the ABS on Tuesday showed the housing price index for established houses edged back by 0.1 per cent in the June quarter. Perth and Darwin, capitals of mining boom provinces, led the way, recording falls of 1.0 per cent and 1.6 per cent respectively. Over the year to June, the index was down by 1.9 per cent. Perth notched up the biggest annual fall, 4.1 per cent, followed by Brisbane, down 3.6 per cent, and Darwin, down by 3.0 per cent.
Although the RBA board had likely made its decision by the time the data was announced, anyone shouting for an interest rate rise would have found no support from the sad and sorry building industry figures.
The RBA is set to make an interest rate announcement at 1430 AEST today. The majority of economists expect the benchmark interest rate to remain at 4.75%.
