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Furniture and floor covering up 4.1% – Hardware, building and garden supplies up 1.1% – Vehicle sales up 0.8%

Adding further fuel to the national economic fire that is housing and housing related expenditure, Australians have upped their purchase of furniture and floor coverings by 4.1% over the year-ended January 2017. Over the same period, sales of hardware, building and garden supplies rose just 1.1% and vehicle sales rose 0.8%

In addition, as the chart below shows, on a seasonally adjusted basis, the nation’s purchases of furniture and furnishings rose 0.5% in January compared with December, but sales of hardware, building and garden supplies leaped 1.1% over just a month.

fig8

To go straight to the dashboard and take a closer look at the data, click here.

There is an intriguing ‘lag effect’ to some expenditure in the housing market. Houses are approved, then built. Fences, gardens and furnishings come next. But when there are alterations and additions, there’s also new furniture, in most cases. It is this perhaps that sees annualised growth in expenditure on furniture and furnishings exceeding that of new dwelling approvals and construction.

This suggests that even as dwelling approvals cool and new dwellings are constructed and completed over eighteen months to two years hence, expenditure on furniture and furnishings will still be strong. Time will tell.

Turning to vehicle sales, Australian households and businesses have never purchased more new vehicles, with total sales hitting 1,171,547 units for the year-ended February 2017. The long pattern of growth is displayed in the following chart, but the most interesting data is probably the ongoing decline in sales of passenger vehicles. This is shown in the blue bars on a monthly basis and the green line on a year-end basis.

fig9

To go straight to the dashboard and take a closer look at the data, click here.

Passenger vehicle sales totalled 480,085 year-ended January, accounting for 40.9% of total sales. The prior year, the proportion was 44.1%. That is a sharp drop-off by any measure.

Doubtless the vehicle sales data has something to do with choices – a range of 4WDs and other ‘trucks’ are not designated passenger vehicles, regardless of how they are used. But, it could also be that households are buying less and less of the vehicles and businesses an increasing proportion.

 

Posted Date: March 30, 2017

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