ABS Releases Key Data Sets for Operators' Interest Rates and Business Outlook
It’s been another busy period for the Australian Bureau of Statistics (ABS) with a number of key data sets released in the first week of March. Data sets on inflation, the economy in regard to GDP and private house approvals specifically. All issues of particular significance to interest rates and the individual business outlook for many operators.
These figures can impact not only interest rates on new truck loans, but also the turnover or income for the business. An issue which has major relevance to affordability to acquire new vehicles and to capacity to meet repayments. We appreciate that not all operators have the time to visit the ABS website for the latest data, so we have prepare a summary of the latest releases.
Latest Inflation Figures
The ABS reports that inflation fell from the December rate of 8.4% to 7.4% as at the end of January 2023. While a good result, the Bureau advises that the January 2023 figure is number two on the largest even recorded inflation increases since 2018 when the monthly reporting started.
The areas which contributed most significantly to the increase were housing, especially rent and new dwelling construction, food and the holiday travel area of the recreation and culture category. In the housing sector rents are showing stronger growth than a year ago while new dwelling price increases are moderating, compared with 12 months ago.
When the more volatile pricing is excluded – holiday travel, fuel and fruit and veg, the underlying inflation is 6.7%, down from December’s 7.4%.
This inflation data will be considered by the RBA in regard to interest rates decisions.
The December quarter GDP figures were released by the ABS and reveal growth slowing to 0.5% for the reporting period. To assist in understanding the latest figures, the ABS has kindly prepared a summary list of things that occurred over the December quarter.
Here are a few of the key points:-
- Economy grew 0.5% - that makes 5 quarters in a row of growth since the COVID-19 lockdowns.
- Growth driven by international trade.
- Continuing price pressures with the highest annual inflation increase since 1990. Driven by electricity, holiday travel and accommodation.
- Consumer spending remained strong but a tightening is seen for discretionary items. Retail sales dropped in December.
- 4% increase in new dwelling investment. Offset by decline of 4.2% in additions and alterations.
- Third consecutive quarter of mining production growth. Domestic manufacturing down 1.8%.
- Exports driven by travel and coal.
- Slump in productivity.
According to figures released by the ABS, the approvals for private house construction have hit a 10 year low. Following a 15.3% December increase, the total number of dwelling approvals fell 27.6% in January on seasonally adjusted figures.
According to Head of Construction statistics for the ABS, Daniel Rossi, the private sector house approvals fell by 13.8% for the month. This is the lowest since the middle of 2012 and the fifth fall in a row. For the data series for private sector dwellings with houses excluded, the drop was 40.8% after a 41.9% increase in December.
On a state-by-state basis, the only increase in total approvals was recorded in Queensland. The 25.6% increase was driven by apartment development approvals. Private sector house approvals fell in all states.
Relevance Truck Finance and Interest Rates
Reviewing the latest economic indicators and statistic may provide a guide to interest rates changes as well as assisting operators plan new truck finance. The rate of inflation is central to the RBA’s cash rate decisions. Decisions which then flow through to the lending markets including truck finance interest rates.
The detailed statistics provided for different sectors of the economy and specific industries, may provide indications of the outlook for a business. This in turn may assist in planning how new truck finance should be structured to work with projected cash flow. Our Compare Truck Financing Rates calculator is an extremely useful tool to assist in working up preferences in regard to finance term, balloon/residual and making decisions around deposit or no deposit.
Once the preferred structure has been decided, this forms an ideal briefing for your Jade Truck Loans consultant to proceed with sourcing the cheapest and most suitable truck loan that best meets the requirements. We offer a range of Truck Loan Products, including Benefits of Truck Rental Finance and Easy Truck Refinancing options.
Some of the latest statistics are encouraging while others may be of concern, especially the private house approvals numbers. The drop in inflation is a good sign but caution is advised when reviewing the figures for just one month. But both the RBA and the Federal Treasurer have commented that the inflation appears to have peaked in December. Assuming that is the case, it could be expected that both households and businesses will see an easing in price and cost rises ahead.
What continues to be a priority, is securing the cheapest interest rates and preferred terms on new truck finance to ensure the repayments will work with cash flow over the full term of the loan. We can assist operators by sourcing cheaper loans and negotiating with lenders to achieve the preferred finance arrangements.
For cheaper interest rates on truck finance, contact Jade Truck Loans on 1300 000 003
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.