ID :
166796
Wed, 03/09/2011 - 11:46
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http://m.oananews.org//node/166796
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Unhappy consumers not buying homes
SIDNEY, March 9 (AAP) - It could be that Reserve Bank governor Glenn Stevens is the only one left with a smile on his face, or at the very least, content with the way the economy is panning out.
Consumers are unhappy, not helped by the vagaries of the federal government's planned pricing of carbon, while the housing industry is appalled by new data showing a slump in home building.
Central bank assistant governor Philip Lowe was singing a familiar tune in a speech on Wednesday, reiterating that the economy needed to be flexible when faced with the impact of the mining boom.
Retaining the cautious stance of consumers towards saving rather than spending would seem to be paramount when faced with a huge boost to the nation's income and a tight labour market.
"At times when there is a lot of spare capacity, all sectors can grow quite quickly without the overall economy butting up against capacity constraints," Dr Lowe told an Australian Industry Group forum in Sydney.
"But this is not the situation we currently find ourselves in."
JP Morgan chief economist Stephen Walters said this was a similar speech given by Governor Stevens two weeks ago.
"It seems that senior (Reserve Bank) officials are worried that no-one is listening, so they keep sending the same message," Mr Walters said.
And he expects Mr Stevens will keep to this script when he addresses a European forum in London later on Wednesday.
Wednesday's consumer sentiment survey will probably be seen as helpful for the central bank's endeavours in keeping inflation under control without reaching for the interest rate lever just yet.
The Westpac-Melbourne Institute consumer sentiment index dropped to its lowest level since July 2010, declining 2.4 per cent in March.
Of news items recalled by consumers, "budget and taxation" stuck out, attracting 42.2 per cent of respondents compared to normal readings of around 20 per cent.
Westpac chief economist Bill Evans said while there was "no specific evidence", he suspected the component's prominence related to the government's carbon price announcement.
Treasurer Wayne Swan said consumer sentiment is steered by a number of factors, but was quick to blame the fall on the opposition.
"One of the causes of it could be the scare campaign being run by many in the community who don't want to tackle dangerous climate change and would rather put their heads in the sand and ignore it," the acting prime minister told reporters in Brisbane.
Other data showed that demand for home loans took a hit in January, largely as a result of this summer's natural disasters.
The number of loans granted in January fell 4.5 per cent in the month with those in Queensland - which bore the brunt of the floods - slumping 16.4 per cent.
NSW also fell by 3.9 per cent and Victoria by 4.7 per cent, states that were also affected by flood, but even disaster-free Canberra declined 3.6 per cent.
The Housing Industry Association (HIA) also pointed to weakness in loans for home construction - down 9.4 per cent - and a 13.5 per cent drop in loans for new homes, both the lowest level since December 2008.
"The long term trend decline in new home building in Australia is an appalling blight on the housing affordability landscape," HIA chief economist Harley Dale said in a statement.
Consumers are unhappy, not helped by the vagaries of the federal government's planned pricing of carbon, while the housing industry is appalled by new data showing a slump in home building.
Central bank assistant governor Philip Lowe was singing a familiar tune in a speech on Wednesday, reiterating that the economy needed to be flexible when faced with the impact of the mining boom.
Retaining the cautious stance of consumers towards saving rather than spending would seem to be paramount when faced with a huge boost to the nation's income and a tight labour market.
"At times when there is a lot of spare capacity, all sectors can grow quite quickly without the overall economy butting up against capacity constraints," Dr Lowe told an Australian Industry Group forum in Sydney.
"But this is not the situation we currently find ourselves in."
JP Morgan chief economist Stephen Walters said this was a similar speech given by Governor Stevens two weeks ago.
"It seems that senior (Reserve Bank) officials are worried that no-one is listening, so they keep sending the same message," Mr Walters said.
And he expects Mr Stevens will keep to this script when he addresses a European forum in London later on Wednesday.
Wednesday's consumer sentiment survey will probably be seen as helpful for the central bank's endeavours in keeping inflation under control without reaching for the interest rate lever just yet.
The Westpac-Melbourne Institute consumer sentiment index dropped to its lowest level since July 2010, declining 2.4 per cent in March.
Of news items recalled by consumers, "budget and taxation" stuck out, attracting 42.2 per cent of respondents compared to normal readings of around 20 per cent.
Westpac chief economist Bill Evans said while there was "no specific evidence", he suspected the component's prominence related to the government's carbon price announcement.
Treasurer Wayne Swan said consumer sentiment is steered by a number of factors, but was quick to blame the fall on the opposition.
"One of the causes of it could be the scare campaign being run by many in the community who don't want to tackle dangerous climate change and would rather put their heads in the sand and ignore it," the acting prime minister told reporters in Brisbane.
Other data showed that demand for home loans took a hit in January, largely as a result of this summer's natural disasters.
The number of loans granted in January fell 4.5 per cent in the month with those in Queensland - which bore the brunt of the floods - slumping 16.4 per cent.
NSW also fell by 3.9 per cent and Victoria by 4.7 per cent, states that were also affected by flood, but even disaster-free Canberra declined 3.6 per cent.
The Housing Industry Association (HIA) also pointed to weakness in loans for home construction - down 9.4 per cent - and a 13.5 per cent drop in loans for new homes, both the lowest level since December 2008.
"The long term trend decline in new home building in Australia is an appalling blight on the housing affordability landscape," HIA chief economist Harley Dale said in a statement.
