Sharp fall in building approvals
A sharp fall in building approvals is another sign the Reserve Bank of Australia should cut the cash rate at its monthly board meeting.
Figures released by the Australian Bureau of Statistics (ABS) on Tuesday showed a 7.6 per cent fall in residential building approvals in October.
National Australia Bank senior economist Spiros Papadopoulos said the figures added to the case for the RBA to cut the cash rate from its current level of 3.25 per cent at its December board meeting on Tuesday.
‘‘Taken alone, absolutely, it suggests they should cut but I don’t think it will be a deciding factor,’’ he said.
The fall in approvals suggested residential construction would remain weak in at least the first half of 2013, Mr Papadopoulos said.
‘‘It supports the story that dwelling investment is weak and will remain weak for the coming quarters next year,’’ he said.
The ABS also released figures showing Australia’s current account deficit widened to $14.9 billion in the September quarter, despite a rise in exports in real terms.
Mr Papadopoulos said the export figures would have a positive effect on official September quarter gross domestic product (GDP) figures to be released on Wednesday, though this would be offset by a two per cent fall in government spending in the quarter.