The momentum continues to come out of the housing market with the Australian Bureau of Statistic’s latest gauge of building approvals for the month of April falling a seasonally-adjusted 5.6%.
The big fall was in private sector dwellings excluding houses which fell 14%. This, together with the value of buildings approved falling 17.4% (residential -7.4%, non-residential -35.6%), is a sign of what we already knew about housing and related sectors: that they are slowing.
But given this is where the monetary policy rubber hits the road, and given the impact on consumer confidence, it is probably a fair bet that the May data is going to fall precipitously.
So the big concern for the economy — and the RBA tomorrow — is that the flat spot the economy is likely to have as a result of the poorly received Budget could really dent growth in this third quarter of the year.
It’s enough for Goldman Sachs to keep their call for a rate cut intact while most other commentators are looking for stability and then rate rises.
Just like the commentators the Australian economy is going through an uncertain patch.