Chinese tourism booms; Firm lending
Lending finance; Petrol prices; Tourist arrivals; China inflation

Lending finance. Total new lending commitments (housing, personal, commercial and lease finance) increased by 1.9 per cent in August, having declined by 4.8 per cent in July.

Petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 4.6 cents to 125.9 cents a litre in the past week. Prices fell in five capital cities.

Tourist arrivals/departures: Tourist arrivals rose by 2.2 per cent in August. And departures increased by 0.6 per cent. Arrivals are up 7.9 per cent on the year with departures up 5.3 per cent.

China inflation: Chinese consumer prices rose 1.6 per cent in the year to September (forecast 1.6 per cent). Producer price annual inflation rose by 6.9 per cent (forecast 6.3 per cent).

What does it all mean?

Filling up the car with petrol is the single biggest purchase for most families. But at present the price of petrol isn’t a major concern for Aussie consumers. Petrol prices fell to their lowest levels in around three weeks. The stronger Aussie dollar over the past week helped to restrain the cost of imported oil and local pump prices. This is a welcome relief for consumers contending with rising electricity, gas and insurance bills in recent months.

Australia continues to be an attractive destination for overseas tourists. Chinese arrivals continue to grow – a valuable source of income for Australian businesses – exceeding New Zealand arrivals.

The Chinese economy continues to remain buoyant. Producer prices, in particular, have risen sharply, boosted by manufacturing and construction activity. This is good news for Aussie exporters.

Lending commitments rebounded in August, though personal loans remain near 14 ½ year lows as consumers remain cautious and have been constrained by elevated household debt and slow income growth.

What do the figures show?

Lending Finance:
Total new lending commitments (housing, personal, commercial and lease finance) increased by 1.9 per cent in August, having declined by 4.8 per cent in July. Commitments had risen by 9.0 per cent in June. Commitments are up 6.3 per cent over the year.

In trend terms, lending rose 0.3 per cent in August.

Personal finance commitments rose by 2.4 per cent in August after increasing by 0.4 per cent in July – the best outcome in nine months. Fixed lending was flat while revolving credit was up 6.4 per cent. Personal loans are down 9.0 per cent on a year ago.
Petrol prices

According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 4.6 cents to 125.9 cents a litre in the past week. The metropolitan petrol price declined by 6.3 cents to 125.4 cents per litre while the regional price fell 0.9 cents to 127.0 cents per litre.

Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 8.6 cents to 125.6 c/l), Melbourne (down by 9.5 cents to 123.9 c/l), Brisbane (down by 8.4 cents to 127.0 c/l), Adelaide (up by 1.8 cents to 117.8 c/l), Perth (up by 0.5 cents to 129.2 c/l), Darwin (down by 0.6 cents to 127.9 c/l), Hobart (down by 0.1 cents to 135.2 c/l) and Canberra (flat to 128.2 c/l).

Overseas arrivals & departures:
Tourist arrivals rose by 2.2 per cent in August. And departures increased by 0.6 per cent. Arrivals are up 7.9 per cent on the year with departures up 5.3 per cent.

In August, tourists from Greater China (China and Hong Kong) totalled 153,200 (mainland China 126,900, Hong Kong 26,300), ahead of New Zealand (113,200). China has passed NZ in monthly arrivals.

Over the past year a record 1,334,900 tourists came to Australia from China, up 12.2 per cent over the year. Tourists from China and Hong Kong rose to a record 1,605,000 over the past year, up 12.4 per cent over the year. Tourists from New Zealand totalled 1,356,200 visitors over the past year, but were up just 2.6 per cent.

China inflation:

Chinese consumer prices rose 1.6 per cent in the year to September (forecast 1.6 per cent), down from 1.8 per cent in August. Annual growth in non-food prices lifted from 2.3 per cent to 2.4 per cent. But food prices fell 1.4 per cent on the year, after declining by 0.2 per cent in August. Over the month of September, consumer prices rose by 0.5 per cent, higher than the 0.4 per cent in August. Beijing policy makers are targeting inflation of less than 3 per cent this year.

Chinese producer price inflation rose by 6.9 per cent in the year to September (forecast 6.3 per cent), up from 6.3 per cent in August. The manufacturing component increased by 7.3 per cent, the most in nine years, spurred by construction spending and government-led infrastructure investment.

What is the importance of the economic data?
Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.

China’s National Bureau of Statistics releases its monthly economic statistics around mid-month. Quarterly GDP data is released around the 19th of January, April, July and October. China’s Customs Office releases trade data, and the People’s Bank of China releases financial statistics, around the 10th of each month. China is Australia’s largest trading partner and changes in the Chinese economic have major implications for the Aussie economy.

What are the implications for interest rates and investors?

There is nothing in the latest data to suggest that interest rates will need to change any time soon. CommSec expects rates to remain on hold over 2017.

China’s economy is in solid shape, causing inflation to creep higher. The strength of China’s economy is positive for Aussie exporters.

Extracted from: The Bull.com

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