The Reserve Bank board meeting today will have found nothing in the economic data issued yesterday – building approvals again slowed in March, car sales were down (because of less selling days in April), but job ads rose for the 4th month in a row, lending more credence to the idea the labour market had steadied.
The bank won’t change rates today, but will consider and probably mention its latest forecasts for the economy, to be published on Friday in the second Statement of Monetary Policy for 2014.
The final reading of the health of the Chinese manufacturing sector from HSBC/Markit produced another weak result.
That saw the Aussie dollar dip from around 93.17 USc, to a low of around 92.55, before rebounding to 92.80c in afternoon trading in Asia yesterday.
The survey, which reports on the medium to small part of the sector, showed that Chinese manufacturing activity slowed last month, with new export orders contracting.
The government’s survey, which covers large companies, showed a rise to just over the 50 point line,which marks the divide between expansion and contraction.
It also showed a fall in export orders.
Chinese trade data for April is out on Thursday and a small recovery is tipped in exports from March’s surprise fall.
The Australian Bureau of Statistics said yesterday the seasonally adjusted estimate for total dwellings approved fell 3.5% in March and has now fallen for two months.
But while there was an 0.7% fall in the seasonally adjusted estimate for private sector houses in March, the seasonally adjusted estimate for private sector dwellings excluding houses fell 7% in March. That’s the usually volatile group covering flats, units and townhouses.
Because of that fall, the seasonally adjusted estimate of the value of total building approved fell 11% in March and has now fallen for three months.
The value of residential building fell 3.2% following a rise of 0.2% in the previous month. The seasonally adjusted value of non-residential building fell 23.3% and has fallen for three months.
The ABS said dwelling approvals increased trend terms in Tasmania (up 6.2%), the Australian Capital Territory (up 0.8%) and NSW (up 0.6%).
Falls were recorded in Queensland (down 3.4% ), South Australia (down 1.5%), Victoria (0.6%) and Western Australia (down 0.1%).
Interestingly the ABS warned that there could be problems with the figures from the Northern Territory.
"In the Northern Territory the trend has fallen sharply in recent months but this should be interpreted with caution as the volatility of dwelling approvals series in the Northern Territory can produce unstable trend estimates," the ABS said. That sharp fall could help explain some of the falls in the past two months.
The ABS said, "Approvals for private sector houses in trend terms rose 1.1% in March, rising for the fifteenth consecutive month.
"Private sector house approvals rose in South Australia (2.3 per cent), Western Australia (1.7 per cent), New South Wales (1.1 per cent) and Victoria (0.9 per cent) while they fell in Queensland (0.3 per cent).
"The value of total building approved fell 2.3 per cent in March, in trend terms, and has fallen for three months. The value of residential building fell 0.9 per cent while non-residential building fell 4.6 per cent in trend terms."
But while there was some weakness in building approvals (which if it persists, could help take pressure off building costs and prices), and job ads continue to improve, according to the ANZ’s monthly survey.
The ANZ said yesterday total job ads rose a seasonally adjusted 2.2% in April from March when they had risen 1.4%.
The average number of job ads per week was 136,091, from an upwardly revised 131,111 in March. That was 1.5% higher than April last year, the first positive growth in at least two years.
"Labour demand has strengthened this year, with each of the main job ads/vacancies measures improving gradually, or at least stabilising over this period," said ANZ chief economist for Australia Ivan Colhoun.
"The pick-up in hiring intentions suggests employment growth will continue to improve modestly in the near term and the unemployment rate should be close to a peak around 6 per cent or slightly lower."
The ABS releases the April labour market data on Thursday.
Some forecasts are looking for a fall of around 5,000, while others are tipping an extra 6,000 to 7,000 jobs, with the jobless rate rising to 5.9%.
And industry figures show new car sales last month fell 5.2% to 80,710.
This was due to April this year having two fewer selling days, so sales per day actually increased from last year.
Sales in original terms were down 17% in April compared to March, but when adjusted for seasonal factors that equated to a rise of 0.3%.
The timing of the Easter holidays can greatly impact sales between March and April.
In the first four months of 2014, sales were running 3.1% behind the same period in 2013, but still pointed to a solid annual pace of just over 1.11 million vehicles.
