Photo: Getty/Mark Metcalfe
Today the Australian Bureau of Statistics released better than expected retail sales and building approval figures. It could mean there’s a consumer revival in the works.
Both sets of numbers are also a pretty good indication that the soft patch in the Australian economy is probably behind us.
Retail sales were particularly good, rising by 1.3% in February. The market only expected 0.3%
Building approvals rose 3.1% in February, when the market only expected 2.5%. Both houses and medium-density dwelling approvals rose in the month.
HSBC Australia and New Zealand chief economist Paul Bloxham explains why it matters:
“The increase in both indicators is consistent with the rise we have already seen in consumer sentiment. Indeed, a collection of evidence is now building to suggest there may be a consumer revival in the works.
“This is a necessary element of our view that growth in the Australian economy will pick up in the first half of this year, after a softer patch late last year, and that growth is already rebalancing.
“Together these indicators suggest that monetary policy is gaining further traction. Given low interest rates are already lifting the interest-rate sensitive sectors of the economy, we remain of the view that the RBA will not need to deliver any more stimulus.”