Andrew Hanlan, analyst at Westpac, notes that Australia’s total credit rose by only 0.07% in the month of June, following gains of 0.14% and 0.13% in April and May (revised down from 0.15% and 0.16%).
Key Quotes
“In June, the mix of credit was: housing +0.16%; business -0.06%; and personal -0.2%.”
“For the June quarter, credit grew by 0.3%, or 1.4% annualised, the weakest 3 month period since mid-2011, at which time business credit was still contracting post the GFC.”
“Annual credit growth is 3.3% currently, the slowest pace since September 2013. Credit growth has progressively eased since expanding by 6.6% in 2015, with growth moderating to 5.6% in 2016, +4.8% in 2017 and +4.3% in 2018.”
“Key to this trend has been the housing sector. Housing credit growth has moved lower over recent years: from 7.4% in 2015; 6.3% in both 2016 and 2017; to 4.7% in 2018. The latest annual reading is 3.5%, the weakest in the history of the series (dating from the late 1970s) – the previous cyclical low was 4.4% in early 2013.”
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