Australia is set for a slowdown
From all accounts, it looks like Australia is set for a wicked slowdown. Four global industrial economies have been protected by commodity prices. They are Canada, New Zealand, South Africa and Australia. This Goldilocks scenario looks to be coming to an end across the board.
There are multiple data points indicating that trouble is brewing for Australia:
- The Westpac-Melbourne Institute consumer sentiment index fell 6.7 per cent in July to 79 points, its lowest point since January 1992. –Sydney Morning Herald
- Australian Bureau of Statistics data released on Wednesday showed growth in owner-occupied housing finance fell by a seasonally adjusted 7.9 per cent in May, its fourth consecutive monthly drop. –Sydney Morning Herald
- Home-loan approvals fell to an 8-year low in May as the Reserve Bank’s 7.25% interest rate turns consumers away from buying houses. – Sydney Morning Herald
- The nation’s largest mortgage broker last month sold 22 per cent fewer mortgages than it did in the same month a year ago. –The Australian
Does all of this spell recession? No. But, it does mean that a slowdown in Australia is underway.