Andrew Hanlan, Research Analyst at Westpac, notes that Australia’s total credit grew by 0.2% in May, a couple of notches down from the 0.4% average for the previous four months in 2018.
Key Quotes
“Since last September, monthly credit growth had ranged between 0.5% on the upside (on one occasion) and 0.3% on the low side (on three occasions).”
“Housing credit grew by 0.37% in May, the softest monthly outcome since the start of 2013. Annual growth is 5.8%, down from 6.3% for both 2016 and 2017, and well below the 2015 outcome of 7.4%.”
“Momentum in housing credit, as measured by 3 month annualised growth, has slowed progressively from a peak of 6.8% in March 2017, to 6.6% in June, 6.2% in September, 5.7% in December 2017 and to 5.1% currently. The May figure itself is a 4.6% annulised pace.”
“Fundamentals point to a further slowing in housing credit growth.”
“Currently, business credit growth is undershooting growth in non-mining business investment, the reverse of the experience in recent years, suggesting a greater reliance by businesses on internal funds.”
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