Statistics count - March 2019

FWPA - Statistics Count Newsletter

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March 2019

Forward

Jim Houghton
Statistics and Economics Manager

The Federal budget is upon us with an election expected in May. All factors contributing to uncertainty. The data is telling us that the economy has slowed with latest GDP running at 2.3%. We have added further graphs to the data dashboard to enable a more comprehensive review of the factors driving the Australian economy. In this issue, as well as examining the GDP data and the specific contributions to growth we also look at the housing approvals and the housing finance data. Collectively this reads more like a weather report with storm clouds increasing but some sunny patches still present.

Top 5 Statistics

2.3%
(GDP seasonally adjusted Year-ending Dec 2018 and 0.2% increase for the quarter Dec 2018)
205,666
(Housing approvals Year-ending Jan 2019 down 9.0% on Jan 2018)
$17.12 billion
(Lending to households for dwellings excl. refinancing an annual change of -20.6% compared to loans of $21.55 billion in Jan 2018)
917,505m3
(Imports HTISC 4407.10 Softwood Sawnwood Year-ending Jan 2019 a change of +48.2%)
6,790,401 BDT
(Exports AHECC 4401.22.99 non-coniferous hardwood chips Year-ending Jan 2019 a change of + 3.2%)

Don’t mention the ‘R’ word
Australia’s economic growth is under pressure, with the latest Gross Domestic Product (GDP) figures causing a range of economists and commentators to mutter about the ‘R’ word. They may be cautious, but the evidence is mounting that like some other countries, Australia’s growth has stalled.
Read more

Wages and debt can drag us down
In an essentially consumption driven economy, economic growth measures like Gross Domestic Product (GDP) record the rate of growth in consumption, among other factors. Soft consumption data - we have seen that reported through pretty lousy retail sales – is directly linked into slow wages growth, that in many cases has failed to keep pace with inflation rates – and that means households have less money to spend. In turn, lower expenditure holds economic growth back.
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Government expenditure and infrastructure driving growth
When Australia dodged the recession bullet in the Global Financial Crisis, one aspect of the national economy stood out. Government’s capacity to support consumption expenditure, and to do so quickly. But longer term, Government expenditure is more focussed into supporting the productive economy. Investments like transport infrastructure and national digital platforms, along with expanded social and community development programs like the National Disability Insurance Scheme (NDIS) are helping keep the economy’s head above water.
Read more

Dwelling approvals stumble – houses still the key
Australia’s residential dwelling approvals are slowing noticeably, with approvals in January down 2.4% on December 2018. Over the year-ended January 2019, approvals were 9.0% lower in total, at 205,666 separate dwellings. Regardless of the steep slowdown and the impact that will have on the future pipeline of work, it is important to focus on the long-term trends and the residual resilience of free-standing houses.
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Loan values tumbling as finance conditions tighten
The total value of home loans is continuing to tumble, falling to AUD17.1 billion over the year-ended January, down 20.6% on the prior year. Underscoring the increasing intensity of the falls, the value of loans was 2.1% lower in January than in December.
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Approaching full employment, effective use of labour remains the big concern
Australia edged closer to full employment in February, with the addition of 4,600 people to the ranks of the employed over the months, contributing to a total rise of 2.3% for the year-ended February 2019. On a seasonally adjusted basis, 12.763 million people were in work in February, with the increasingly important Labour under-utilisation rate falling to 13.0%.
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Sawn softwood imports up 48% YE January
Australia’s imports of sawn softwood lifted to 917,505 m3 over the year-ended January 2019, rising 48.2% on the prior year. Although there is decided evidence of a downturn in demand and imports, the record levels of annual imports have been stable over the last few months. On a monthly basis, imports in January 2019 totalled 70,274 m3, down just 1.5% on January 2018. Imports are more stable than the market situation might suggest.
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Log and chip exports remain near record levels
Exports of softwood logs and hardwood chips both remained near record levels over the year-ended January 2019. Total woodchip exports were down 0.8% to 7.444 million bone dried metric tonnes (bdmt), but that includes renewed confidentiality restrictions for softwood chip exports, meaning total exports are likely to have been higher. Softwood log exports eased 7.8% to 3.644 million m3 over the year.
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