It is remarkably difficult at present to stand aside from the constant stream of comment and ever changing forecasts about the state of the economy. I try to adopt a longer term approach, but its quite hard.
I do wonder about the constantly updated national and international economic forecasts. Apart from anything else, there is always an optimism/pessimism problem. The forecasts have also become a factor in their own right because of the way they feed into expectations.
To start with a somewhat random update on the latest official statistics.
The value of Australian engineering construction activity for the December quarter 08 showed continued strong growth in both trend and seasonally adjusted terms, up more than 5% from the quarter before, well over 20% from the previous December quarter.
However, the value of work commenced in the December quarter at $A18.7 billion was down 17.5% from the September quarter 08.
The attached graph from the ABS shows trend estimates. You can see the way in which the long mining boom drove private sector activity. Now that has gone into reverse.
The thing to watch with these numbers is public sector activity.
Actions by Australian Governments to step up investment spend have still to flow through into increased activity. Government spend is up significantly in year on year terms - +24.3% in trend terms, just a little less than the private sector increase - but most of the measures are still in the final planning stages. There is likely to be a gap between the end of the private sector investment boom and further increases in Government activity.
The February statistics for short term overseas arrivals and departures were interesting. These figures are very variable, but do provide hints as ro activity.
In terms of arrivals, the side graph shows how short term visitor numbers have increased since October 2008 in both seasonally adjusted and trend terms and are now around the level they were in February 08.
Within the aggregate numbers, there have been very large falls in the number of Japanese and Korean visitors, about what you would expect given the economic position in both countries. However, these have been offset by a range of smaller increases including Chinese visitors.
The position is very different if we look at short term departures from Australia. If you look at the ABS graph here, you can see the drop in numbers over the second half of 2008. More Australians have chosen to stay at home.
In combination, there has been a fall in international movements. This is generally attributed to the international downturn. However, the numbers suggest that it is as much Australians' reaction to the downturn, rather than the downturn itself that, that has caused the fall.
I am out of time this morning. I will continue my meander in my next post.