Slow credit growth, falling export prices and a drop in home-building approvals – it was hardly an encouraging set of economic data on Thursday.
But it was a pretty good illustration of the problems facing the economy.
A 7.9 per cent fall in the export price index in the June quarter, reported by the Australian Bureau of Statistics on Thursday, was dominated by weaker minerals markets.
It extended the fall to since the peak in 2011 to 15 per cent.
The fall has been partially cushioned by a lower exchange rate.
In foreign currency terms, export commodity prices have dropped over 30 per cent in just three years, according to the commodity price index compiled by the RBA.
But the hit to export revenue will still drag on the economy, accentuating the impact of the slowdown in resource sector investment.
The building industry is one of the great hopes for the economy’s transition away from mining, the so-called rebalancing.
But on Thursday the bureau reported residential building approvals by local councils fell by five per cent in June.
Home-building is the focus of economists when the monthly figures are released.
But the more volatile non-residential component – shops, hospitals, offices and the like – is just as important.
There was actually a big rise in the value of non-residential approvals in June, the second hefty gain in a row.
But the overarching trend is in the other direction.
The total value of approvals – residential and non-residential combined – fell in both the March and June quarters to be down by 15 per cent or $1.2 billion per month compared with the final quarter of 2013.
As a proportion of gross domestic product, total building approvals are around five per cent, a level normally associated with slumps in the building sector.
That’s not what a rebalancing enthusiast wants to hear, especially the RBA, which has been holding interest rates low in order to speed the process along.
But the RBA’s own credit figures, also released on Thursday, confirm there’s still a lot of work to be done.
Total credit outstanding rose by 0.7 per cent in June, the biggest monthly rise for six years.
But don’t be fooled – a one-off gain in credit advanced to businesses inflated the numbers.
The RBA said the figures were “boosted by the provision of bridging loan facilities associated with the re-structure of a domestic corporate entity.”
It seems likely that “domestic corporate entity” was Westfield.
In the absence of this restructure, credit growth would probably have plodded along at its recent pedestrian pace, about 0.4 per cent a month, with annual growth still lodged half-way between four and five per cent rather just over five per cent as report on Thursday.
That’s barely enough to keep up with growth in the value of gross domestic product.
There is much yet to be told in the rebalancing story.