Data Vault – A weekly wrap up of key economic releases in Australia and beyond

December 19, 2011

Economic Data Vault

December 19th 2011

Welcome to our weekly Data Vault. The Vault is put together by our team here at Lighthouse and we offer it as a resource to readers and clients who want to quickly get a feel for the data over the week without having to read a full blog or economic report. It will be released each Monday morning and while our primary focus is Australia we also include our key overseas indicators.

Australian Data

Housing Finance

Housing finance figures for October showed that while the number of approvals continue to hold up, rising 0.7% over the month, the value of lending remains soft, especially when adjusted for re-financing. Total value of owner occupier commitments fell by 1.2% over the month while the total value of commitments made by investors fell by 5.5% after steadily rising over the previous three months.  Meanwhile first home owner participation continues to drift higher as a proportion of total activity, rising from 15.1% in July to 17.9%

Trade Balance

Australia’s trade surplus narrowed to 1,595m in October after it was expected to fall to $2,000m while last month’s surplus of $2.564 was revised down to $2,249m. The latest drop in the surplus was a result of a 2.4% rise in imports, driven by continued growth in capital goods and a jump in non-monetary gold while exports slide 0.2%. Exports held up quite well in October despite some early signs of lower spot commodity prices filtering through with an uptick in volumes largely offsetting the drop in prices.

NAB Business Survey

The NAB’s monthly business survey for November which was taken in the wake of the RBA’s decision to lower the cash rate by 25bp in November saw both business confidence and conditions largely hold steady. The headline confidence index was unchanged at 2, below its long run average of 6 while Conditions improved slightly from -1 to 1.  The breakup of conditions saw profitability improve but remain negative, while forward orders went from negative to flat and the employment index rose back to 3, the level it was at in September after falling below 0 last month.

Westpac Consumer Survey

The consumer confidence survey, which runs a month ahead of the business survey, threw up a largely unexpected outcome considering the survey was taken in the wake of the RBA’s second 25bp rate cut with confidence slumping 8.3%. Westpac suggested “the likely explanation is that respondents’ concerns over the reasons behind the rate cut may overwhelm the perceived benefits of the cut itself”. This certainly seems the case as consumer’s expectations for the economy over the next 12 months  fell 19.4% while expectations for the next 5 years dropped 14.4%

Westpac Consumer Survey Quarterly question

The key from the survey however quarterly question of where the wisest place for savings is. The latest response to this question indicated a significant increase in risk aversion with the number of respondent indicating that paying down debt was the best option jumping from 18.7% to 26.6%, with the only higher measure coming in March 2010. Looking at the longer term structural shift we can see a clear shift towards the safety of bank deposits and fixed interest or using it to pay down debt while consumer’s appetite to put it into property or the share market has fallen to its lowest level since the series began.

Offshore Data

US Fed Surveys

The December Fed regional activity surveys this week with the Empire manufacturing index jumping from 0.61 to 9.53, it highest reading since May of this year after it was expected to rise to 3 as new orders surged back into positive territory with the index hitting 5.1 while the employment index rose from -3.66 to 2.33. The Philadelphia Fed index also improved nicely, rising from 3.6 to 10.3 against expectations of an increase to 5 with new orders jumping from 1.3 to 9.7 however the employment index dipped from 12 to 10.7.

US Inflation

The recent easing in inflationary pressures continued in the US in November with the headline CPI flat over the month with the annual rate easing slightly from 3.5% to 3.4% while the rise in the USD continues to see pressures from import prices ease with the annual rate slowing further in November. The core reading of inflation however continues to see pressures build with the 0.2% gain in the non-food and energy CPI pushing the annual rate to 2.2%, its highest reading since October 2008 when the annual rate was sliding lower as the US economy faced widespread deflationary pressures in the wake of the housing bubble collapse.

US Industrial Production

US industrial production unexpectedly fell in November, dropping 0.2% after it was expected to rise by 0.1% over the month. Manufacturing, which accounts for almost 75% of total production fell 0.3% driven by a fall in production or motor vehicle parts along with computers and electronic equipment. Meanwhile the other two major components, Utilities and Energy, both experienced moderate gains over the month, rising 0.2% and 0.1% respectively.   

EU ZEW Survey

Germany’s ZEW centre for economic research’s economic outlook survey was a touch better than expected in December however indices remain at very depresses levels with the European index improving slightly from -59.9 to -54.1. Germany’s index climbed from -55.2 to -53.8 after it was expected to slide further to -55.8 while Frances rose from 55.8 to -57.1 with Italy’s posting the weakest improvement, rising from -58.7 to -56.3.  The survey also covers the UK with their growth outlook actually deteriorating with the index falling from -34.2 to -36.6 however is still in much better shape that those on the other side of the Channel


PMI’s across Europe remained weak in December with both the EU manufacturing printing below 50 for the 5th straight month while the services PMI’s printed below 50 for the 4th straight month with the composite index of the two now sitting at 47.9 and continues to suggest GDP will print negative in the fourth quarter. Manufacturing across both Germany and France contracted once again however the positive was that they both experienced a modest improvement in their services sector.

CH Flash PMI

HSBC released their flash manufacturing PMI reading for December and it once again indicated that manufacturing activity in China contracted, albeit at a slower pace than the previous month as the index improved from 47.7 to 49, however still remained below the critical 50 level, the inflection point between expansion and contraction. The flash PMI has now been below 50 for 6 of the past 7 months with the only read above 50 coming in October. It is reported that the flash read is based on 85-90 percent of the total number of responses to its monthly survey

Yours in data – The Lighthouse Team.

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One Comment on “Data Vault – A weekly wrap up of key economic releases in Australia and beyond”

  1. tristencosgrove Says:

    Great work, thank’s for your efforts!


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