Building approvals and retail trade posted rises in August, but in both cases the gains made up less than half the ground lost by falls in July.
Neither household spending nor building look to be getting ready to take over from the mining sector as the engine of growth.
The figures from the Australian Bureau of Statistics (ABS) on Thursday showed retail turnover rose by 0.2 per cent, seasonally adjusted, between July and August.
That followed a fall of 0.8 per cent.
The ABS survey of retailers does not include spending on motor fuel or vehicles, items like gas and electricity, health care, insurance, council rates, nor sales over the internet where the business is not registered in Australia.
Even so, it’s a good guide to the trend in household spending – and the trend, according to the bureau, is rising at 0.2 per cent a month or 2.9 per cent on an annualised basis.
That weak growth by historical norms, but not as weak as it looks.
The latest quarterly figures show the trend in prices for retail goods and services was flat over the year to June.
And if it’s still flat, then growth in retail trade in real terms is about three per cent, a pace that would be better described as modest rather than weak.
Not so for the trend in building approvals.
Approvals for new residential buildings rose by 6.4 per cent in August, but that followed much steeper fall in July.
The number of residences approved for construction in August was 12,046 after seasonal adjustment, compared with an average of 12,152 a month over the preceding 12 months and a 13,411 average for the preceding decade.
And the trend from this already below-average level, the ABS says, is slightly negative.
Most observers focus on residential approvals, but the non-residential component of building is no less important.
The value of non-residential approvals in August was up by 9.8 per recent compared with July, reversing only a small part of the falls totalling 49 per cent in June and July after a spike in May.
The level of non-residential approvals in August was 17 per cent lower than average for the 12 months leading up to August and two per cent lower than the average of the past decade.
The price of non-dwelling building work is around now around 10 per cent higher than the past decade’s average, meaning that if the value of building is now two per cent below average in dollar terms it’s around 12 per cent below par in real terms.
It’s a familiar story – large sections of the non-mining economy are flat or, at best, posting modest growth rates.
The question of which parts of the economy will take up the baton after the mining sector has run its race remains unanswered.
And as long as it stays that way, further interest rate cuts will stay on the agenda at the next Reserve Bank of Australia (RBA) monetary policy meting.
