Forex News – Rising confidence in Australian business and housing
February 11, 2014 10:09 am
Confidence in Australia’s business sector appears to be on the rise while the housing sector is also showing signs of improvement.
This was welcome news, especially since the important mining sector has been on the decline and putting a dent in the economy.
According to the National Australia Bank (NAB) monthly business conditions survey, overall confidence rose to a near-3-year high in January. The index rose to +4 in January from +3 in December, the highest since March 2011.
Meanwhile, the main measure of business confidence climbed 2 points to +8 in January from +6 in December, the first improvement in 4 months and above its long-run average.
NAB’s chief economist, Alan Oster said the following:
“The improvements over recent months have established a clear upward trend in business activity, suggesting some upside potential to our current growth outlook.”
Oster added that “Conditions look to have turned around a little faster than we had expected just a few months ago, with low interest rates and depreciating AUD gaining surprisingly good traction in some non-mining sectors of the economy.”
Other upbeat data were from the housing sector. A report released by the Australian Bureau of Statistics showed that the average price of houses across Australia’s capital cities rose 3.4% in the fourth quarter from the previous quarter.
The Reserve Bank of Australia hopes that a revival in non-mining sectors will offset the drag on the economy from the slowdown in the mining sector boom. The RBA left rates on hold at its February policy meeting, citing improving economic conditions and a pick-up in inflation. The central bank cut rates to a record low of 2.5 percent last August and there is speculation that rates will remain unchanged for months to come.
The Australian dollar rose against its US counterpart after the data, rising to a near 1-month high above 0.9030 from a pre-data level of 0.8943.
Confidence in Australia’s business sector appears to be on the rise while the housing sector is also showing signs of improvement.
This was welcome news, especially since the important mining sector has been on the decline and putting a dent in the economy.
According to the National Australia Bank (NAB) monthly business conditions survey, overall confidence rose to a near-3-year high in January. The index rose to +4 in January from +3 in December, the highest since March 2011.
Meanwhile, the main measure of business confidence climbed 2 points to +8 in January from +6 in December, the first improvement in 4 months and above its long-run average.
NAB’s chief economist, Alan Oster said the following:
“The improvements over recent months have established a clear upward trend in business activity, suggesting some upside potential to our current growth outlook.”
Oster added that “Conditions look to have turned around a little faster than we had expected just a few months ago, with low interest rates and depreciating AUD gaining surprisingly good traction in some non-mining sectors of the economy.”
Other upbeat data were from the housing sector. A report released by the Australian Bureau of Statistics showed that the average price of houses across Australia’s capital cities rose 3.4% in the fourth quarter from the previous quarter.
The Reserve Bank of Australia hopes that a revival in non-mining sectors will offset the drag on the economy from the slowdown in the mining sector boom. The RBA left rates on hold at its February policy meeting, citing improving economic conditions and a pick-up in inflation. The central bank cut rates to a record low of 2.5 percent last August and there is speculation that rates will remain unchanged for months to come.
The Australian dollar rose against its US counterpart after the data, rising to a near 1-month high above 0.9030 from a pre-data level of 0.8943.
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