Volatile building approvals tumble again
Building approvals have continued their volatile performance since the start of the year, and could face further pressure in the months ahead as rising interest rates take their toll on the housing market.
The Australian Bureau of Statistics said dwelling approvals dropped 18.5 per cent to 15,183 in March, following a 42 per cent spike in February.
This came after a 27 per cent slump in January when the Omicron COVID-19 variant hit council offices and the approval process.
House approvals fell three per cent to 9932 in the month, while other dwellings declined 29.9 per cent to 5004.
Looking ahead, economists expect the housing market, along with confidence, will be among the first areas to be hurt by rising interest rates.
The Reserve Bank of Australia raised its cash rate to 0.35 per cent from a record low 0.1 per cent this week, the first increase in more than a decade. Governor Philip Lowe warned of further hikes to come.
Prime Minister Scott Morrison used the spike in US interest rates and other global economic pressures to argue that now is not the time to change government in Australia.
The US Federal Reserve raised its key interest rate by 0.5 percentage points on Wednesday, its biggest hike in 22 years, as it battles a massive inflation problem.
Financial markets are ready for a similar move in June.
The prime minister has been defending his government's credentials in the face of sharply rising inflation, and having previously argued interest rates will always be lower under a coalition government.
Mr Morrison insists Australia is enduring global pressures, noting US rates are now up 75 basis points, as they are in Canada, and are up five times the rate in New Zealand as they are in Australia.
"These pressures are real," Mr Morrison told ABC radio on Thursday.
"And the last thing Australia needs is a Labor Party that doesn't know how to manage money and a cavalcade of independents which will just create instability and chaos in the parliament."
Labor leader Anthony Albanese told a business forum Australia is unprepared for the triple whammy of rising inflation, falling real wages and interest rate increases.
"This means Australia needs investments that ease the cost of living for families, help more Australians into work and into higher paid jobs, and grow the economy without adding to inflation," he told the Australian Chamber of Commerce and Industry.
A Labor government would boost wages through productivity, invest in skills and training, and revitalise domestic manufacturing, while promoting women's economic opportunity and universal child care, Mr Albanese said.
Labor's climate change action plan would also create jobs, attract investment, reduce costs for existing businesses and boost new and emerging industries, he said.
The ABS also released international trade figures for March, which showed the surplus widened to $9.3 billion from $7.4 billion in February.
Imports fell five per cent, or by $1.9 billion, following a sharp rise in February, while exports were barely changed with a modest fall of $72 million.
