Australian Data
Construction work done
Total construction work completed in the third quarter surged by 12.5% to a total of $47.7bln which was well ahead of the markets estimates of a 2% rise while last quarters increase of 0.7% was revised down to a marginal fall of 0.1%. The spike in work completed was driven by a 22.6% rise in engineering work completed with 80% of the growth coming from WA, presumably from the mining sector, while building work completed remained soft, posting a marginal increase of 0.6%. The private sector was responsible for the entire gain with work completed by the public sector continuing to taper off as the stimulus from the GFC fades.
Offshore Data
US Chicago Fed National Activity Index
The Chicago Federal Reserve National Activity index was once again softer than expected in October with the index remaining in negative territory for the 8th time in the past 9 months. The Index improved slightly to -0.13 from a revised -0.20 however it was expected to rise to 0.19. Personal consumption and housing remained negative for the 57th straight month while sales orders and inventories were unchanged, the employment index softened and is now barely positive while production and income rose back into positive territory after falling for the past 2 months.
US Existing home sales
Existing home sales unexpectedly rose in October, climbing 1.4% after the market had been expecting them to fall 2.2% adding to the negatively revised 3.2% fall in September. The gain was entirely driven by houses with unit sales flat over the month while the supply of houses currently on the market fell to 8 months worth of sales at the current pace, down from 9.5 in July. Sales continue to be dominated by the lower end of the market with over 90% of sales below $500k while prices continue to slide with the median and average price both falling in October.
EU PMI
PMI’s across Europe remained weak with the European manufacturing index falling more than expected to 46.4 while the services index unexpectedly rose but remained well below 50 at 47.8. The next result left the composite index now sitting at 47.2. Both Germany and France also saw their pull back in manufacturing accelerate. The European PMI’s are clearly in recession territory as seen in the chart which is likely to result in an intensification of the sovereign crisis as it provides a huge drag on revenues, which results in pressures for further austerity and the negative feedback loop continues
China Flash PMI
HSBC’s flash manufacturing PMI reading for November was quite weak with the index slumping from a 5 month high of 51.1 the previous month to 48, which is a 36 month low (a reading below 50 indicates contraction while above 50 indicated expansion). Within the index there were also sharp falls in production and new orders while input and output prices declined marking a change in direction which is consistent with the recent fall in commodities, especially base metals such as iron ore, the export of which Australia is obviously heavily reliant on