The data avalanche continues with the ABS releasing business indicators and building approvals this morning.
The key pieces of data were Company Profits, which feeds straight into the Q3 GDP number to be released later this week, and Building Approvals which were supposed to show a big reversal from last month’s huge rise of 16.9%.
The good news for economy was that economists’ expectations undershot the actual outcomes by a long way meaning the economy is healthier than they expected.
Building Approvals were expected to fall 5% but only dropped 1.8% seasonally adjusted and the annual rate is now 23.1%.
Company gross operating profits rose a solid 3.9% in the 3rd quarter much stronger than the 1% that economists had predicted.
Both these numbers are solid and building in particular, the widely touted “missing link” in Australia’s transition away from the mining investment boom is looking like it is on a sustainable track higher.
Governor Stevens has consistently said in his statement after each month’s Board meeting that “The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet.”
It seems like the economy is performing exactly as they expected.