- Tom Kennedy, JP Morgan economist
Australia's housing construction lost some steam, as building approvals for new homes suffered their biggest decline in more than three years. The number of approvals for homes, apartments and townhouses plunged by 12.7% in November, according to the Australian Bureau of Statistics. In contrast, economists had predicted a 3.0% decline in consents. Measured on an annual basis, approvals dropped 8.3% in November, following a 12.3% advance a month earlier. Australia's construction sector has enjoyed a solid run over the last few years, with strong house-price inflation and ultra-low interest rates boosting demand for housing. However, over the last few months demand started to wane in the wake of policy changes aimed at calming investors' activity in the housing market and supporting the financial system.
A separate report showed Australia's trade deficit shrank in November to $2.9 billion from a revised $3.25 billion in October. Exports climbed a seasonally adjusted 1% to $26.76 billion in November, driven by a 15% increase in rural goods exports such as fruit and vegetables. At the same time, imports dropped 1% in the reported month to $29.67 billion. The data suggested trade would not contribute much to Australia's GDP growth in the fourth quarter compared to the September quarter, when exports added 1.5 percentage points to economic output.
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