RBA Cuts to 0.75% Amidst Queensland Building Approval Free Fall as Lack of Activity Bites: CCIQ
The Reserve Bank of Australia has lowered the official cash rate to 0.75% as downside risks continue to weigh on the global economy and Australian policy makers contend with a sharp fall in building approvals of 1.1% according to the latest data released by the Australian Bureau of Statistics.
Queensland Building approvals fell by 21.4% in August in seasonally adjusted termsto 2124 dwellings representing the worst month since March 2012.
The Chamber of Commerce and Industry Queensland (CCIQ) notes that construction activity in the private sector remains weak in the absence of any overarching improvement in conditions in the state economy.
CCIQ Head of Media, Dan Petrie said the approvals data is matching the same levels seen following the global financial crisis in 2008 and is being exacerbated by a business sector that is struggling, drought and a more cautious consumer.
“Building approvals are in free fall and the fact remains that, despite record low interest rates, the number of people wanting to build property in a state that is experiencing strong population growth,is at the lowest level in almost a decade.
“State and local governments have to assess the approval times for greenfield releases as well as ensuring there is adequate infrastructure to service these new areas.
“The data is not surprising; and the tales of economic strength and super infrastructure spend must be framed in the context of reality that many projects slated to begin are still years off,” Mr Petrie said.
The Reserve Bank in its statement said the decision to lower official rates was borne out of the need to support demand in economy.
CCIQ notes that the latest data comes as business confidence levels according to the Suncorp-CCIQ Pulse remain at four year lows.