Australia is set for a slowdown

| 9 July 2008 06:00

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.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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