New home sales rose in January
New home sales increased again by +1.8 percent in January according to the Housing Industry Association (HIA).
This generally bodes well for the dwelling construction outlook through 2015.
Detached house sales in Queensland are displaying a modest upward trend but according to the HIA "are continuing a year-long downward trend in South Australia suggesting that in the short term at least new housing conditions in South Australia will remain the weakest of the five mainland states.”
During the three months to January 2015, sales increased by 15.9 per cent in Queensland but declined by 3.6 per cent in South Australia.
Mixed conditions for businesses too
That the two-speed nature of the economy which has seen the southern states lagging - at least, until recently in Tasmania's case - was underscored by today's ABS release on Counts of Australian Businesses.
The ABS recorded that there were 2,100,162 actively trading businesses in Australia in June 2014 with the number of actively trading businesses in Australia increasing by 1 percent over the financial year, and the business entry rate increasing nicely from 11.2 percent in 2012-13 to 13.7 percent in 2013-14.
This is promising and suggests that nascent businesses are indeed finding ways to fund their start-up phase.
In any case, the notion that nascent businesses are overwhelmingly funded by small business loans is a myth, as I looked at in a little more detail here.
Economic conditions patchy
However, the number of trading businesses did decline in South Australia and Tasmania, while the four year survival rate was weakest in the Australian Capital Territory, which all rather suggests that business conditions are at best patchy.
Tomorrow's interest rate decision hangs in the balance, with today's weak GDP partials (inventories in particular will be a drag on the Q4 GDP reading) and soft inflation indicators tilting the balance marginally in favour of another rate cut.
It will be a close call but whichever it is to be we can expect either to see a cut or an explicit easing bias re-introduced, with another cut in the first half of this year deemed to be all but a certainty.