Building approvals fell by a seasonally adjusted 4.7% during August, according to the latest figures from the Australian Bureau of Statistics.
The numbers show approvals for residential properties fell by 4.7% during August, with other private sector dwellings recorded a third consecutive rise of 1.4%. In the year to 31 August, total dwelling approvals rose by 4.4%.
For the month as a whole, the value of total building approvals fell by a seasonally adjusted 4.2%, with the value of new residential buildings dropping 7.8%. The value of residential alterations and additions dropped by 5.5%.
The result comes after a Reuters poll predicted that total approvals would remain unchanged during the month, although estimates did range from a rose of 3% to 3.6%.
The Reserve Bank of Australia has said in its Financial Stability Review that the economic and financial system in Australia remains in a “relatively strong condition”, but there are still uncertainties plaguing the market.
“Australia’s financial system, while not immune to swings in sentiment affecting global markets, has come through the disruptions to date in relatively good shape,” the RBA said.
“Indicators of the financial strength of Australian banks have generally continued to improve recently. In aggregate, Australia’s banking system remains profitable during the crisis period, and profits have increased further in the latest half year.”
However, it also said the Australian economy should adopt a cautious approach to risk, even though unemployment remains low.
Separate figures from the RBA show private sector credit rose by 0.1% during August, following an increase of 0.3% following July.
Communications minister Stephen Conroy has said a progress report on the National Broadband Network will be released soon, just hours after the world’s richest man criticised the massive infrastructure project.
Conroy told ABC Television a report will be delivered on the progress of the network. “I’m sure there’s a whole range of information that we’ll be making available very, very shortly on some of these key questions,” he said. “It would be very happy to put it out into the public domain.”
The world’s richest man, Mexican telco investor Carlos Slim Helu, also said at the Forbes Conference that the NBN costs too much money and that it would be better to combine fixed-line services alongside wireless.
“It’s too much money. It’s not necessary to invest so much money because technology is changing all the time,” he said.
The Australian sharemarket has opened lower this morning following weak leads from Wall Street and European markets, and has continued to fall during the morning.
The benchmark S&P/ASX200 index was down 50 points or 1.01% to 4592.8 at 12.20 AEST, while the Australian dollar has continued to increase in value, reaching US97.3c.
ANZ shares lost 2.2% to $23.60 as Commonwealth Bank shares also lost 1.3% to $51.37. Westpac fell 2.2% to $23.19 as AMP dropped 0.4% to $5.16.
Ports and rails operator Asciano Group has secured a 10-year coal contract from Centennial Coal Company, worth about $550 million.
“We look forward to growing our partnership with Centennial and continuing to deliver superior quality of services for the long term,” chief executive Mark Rowsthorn said in a statement.
“We are very pleased to have secured this contract with Centennial Coal as it demonstrates our ability to retain our customers in NSW through good service quality and strong operating expertise.”
The International Monetary Fund has said in a new report that interest rates will continue to rise if the mining boom props up the rest of the Australian economy, Reuters reports.
“Should the recovery unfold as expected, monetary policy will need to tighten further to contain inflation pressures generated by the mining boom,” the IMF has apparently said in the report.
The warning comes was Westpac retail and business banking head Rob Coombe has told the Australian that banks could be forced to raise rates above the RBA official rate in order to recoup higher funding costs.
He told the publication that costs remain high despite improved financial conditions.
Japanese manufacturing activity fell in September for the first time in 15 months, according to the Nomura/JMMA Japan Manufacturing Purchasing Managers Index.
The index fell to a seasonally adjusted 49.5 in September, down from 50.1 in August, below the 50-point level separating expansion from contraction. The accompanying report says the index for export orders fell by 0.3 points.
“The risk of further weakening of manufacturing activity remains, but we do not foresee a sharp contraction in activity given firm exports,” Nomura Securities economist Minoru Nogimori said in a statement.
On Wall Street, stocks fell as investors grow pessimistic ahead of the fourth quarter, when many analysts expect economic data to remain weak. The Dow Jones Industrial Average lost 22.86 points or 0.21% to 10,835.28.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
