Tuesday, February 5, 2013

A not so rosy outlook?

Building approvals data this week was disappointing although divergences in a volatile series twixt seasonally adjusted and trend data can create opportunities for selective reporting so I will defer to others for appropriate comment:

Building approvals fall sharply in December
Building approvals decline; but the trend data is up ... just
Still waiting for a building industry recovery

The Australian seasonally adjusted data was well down but the trend slightly positive. Queensland was the reverse of that. Clear as mud? There is also an update on this from OESR which actually presents the data in a not particularly positive way for Qld!

Actually, not sure if OESR is not now known as the Government Statistician, but if there has been a name change we will no doubt all be better informed statistically for that? Perhaps not, and an update on the OESR methodology of tracking building through the approvals process would be worthwhile!

Particularly when it comes to regional data which seems rather a user-unfriendly discontinuous mess in the ABS series. The Master Builders have a media release today that the regions in Queensland are driving recovery. I'm not convinced that is really as solid as they present given regional variation and recovery from some very depressed levels for some regions? This is where the OESR methodology was particularly useful with its analysis of approval stocks.

Last week the Master Builders also released their quarterly survey of industry conditions. What is interesting here is that on a regional comparison Far North scores bottom of every single category ! I did check through a couple of the previous reports and while scores have been lower, Far North hasn't been bottom on every measure before. I wouldn't draw too much from such an industry survey but it is a curious anomally from recent optimism?




What is clear is that the current cycle of interest rate cuts haven't been nearly as effective in driving this sector as previous cycles. 

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