Forex News: AUD/USD: Australian completed construction data disappoints, residential especially
_iNVEZZ.com: Wednesday, February 26th:_
The Australian Bureau of Statistics (ABS) today reported that its Construction Work Done measure fell one percent q/q to a seasonally adjusted A$53.101 billion in the fourth quarter of 2013. Analysts had expected a 0.4 percent increase. The prior period saw a rise of three percent, revised up from 2.7 percent.
Compared with the same seasonally adjusted quarter in 2012, the value of completed construction work rose just 0.2 percent.
The ABS said that total building construction work dropped 1.6 percent to A$20.777 billion quarter-on-quarter, but climbed an annualised 0.2 percent.
Engineering work, which includes mines, roads, bridges and other infrastructure, contracted 0.5 per cent to A$32.32 billion in the quarter, while rising 0.1 percent on the same period in 2012.
Residential construction contracted 1.7 percent in the quarter, a statistic which National Australia Bank senior economist Spiros Papadopoulos describes as “the big disappointment”.
“With all the monthly indicators pointing to some better growth we had hoped to see residential activity grow about two per cent,” Papadopoulos writes. “It looks like there is very little improvement in non-mining investment activity.”
He believes that there will be a continuing lag between the slump in mining investment and a pick-up in other sectors of the economy, such as housing.
The Reserve Bank of Australia had, notes Papadopoulos, “hoped that dwelling investment would be one of the brighter lights of investment growth this year but it’s a very slow recovery”.
JP Morgan economist Tom Kennedy writes of the weaker-than-expected data: “It shows us construction activity is still soft and we haven’t yet seen any significant uplift despite major (interest rate) easing.”
Housing Industry Association economist Geordan Murray has this take on the data: “We are seeing good things across a number of leading indicators, but today’s data reaffirms our view that the speed and strength of the recovery in residential building has been overstated in some forums.”
In Asian trading today, the AUD/USD fell sharply to 0.8967 but has since recovered to be currently at 0.9018. The rebound has been supported by the 89-day simple moving average.
In the United States today, New Home Sales is due out at 15:00 UTC, with expectations for a 2.2 percent drop to an annualized 405,000 in January from the prior 414,000, referable to weather-induced falls in both Housing Starts and Building Permits in January.
Resistances today: 0.9030, 0.9050 and 0.9075
Supports: 0.8985, 0.8965 and 0.8940.
