The economic week in review
Below is CBA economist Lucinda Jerogin’s round-up of this week’s economic data: Key points: Australian consumer sentiment fell 4.7% in October to be among the weakest level since survey records began in the early 1970s. Building activity data showed residential activity strengthened in Q2 with commencements up 7.0%/qtr and completions rising 5.8% to their highest The post The economic week in…
This week's economic data roundup was relatively subdued, with no major ABS data scheduled for release. However, the Consumer Sentiment Index and building activity provided the main updates. The WBC-MI Consumer Sentiment Index declined by 4.7% in October to 80.4 from 84.4 in September, primarily due to the RBA's September rate hike.
The gap between consumer sentiment responses before and after the RBA decision was the largest since 2019, with 80% of respondents anticipating further mortgage rate increases. In the construction sector, Q2 residential activity showed a 7.0% quarter-over-quarter increase in commencements and a 5.8% rise in completions, reaching the highest level since Q1 2020.
Meanwhile, non-residential construction pipeline as a share of GDP has grown, driven by private sector projects, especially data centers, which now account for almost four times more activity than office buildings. Looking ahead, data centers, renewables, defense, and state capex programs are expected to maintain construction activity growth.
Offshore, tensions in the Middle East continue to drive oil prices higher, with a 15% probability assigned to a major military escalation in the region. In the US, all 19 Fed officials backed the 25 basis point rate hike, with many predicting additional hikes this year. Meanwhile, Japan's August labor cash earnings remained strong, supporting further interest rate hikes from the Bank of Japan.
New Zealand's NZIER Quarterly Survey of Business Opinion indicated a significant boost in business confidence in Q3 2026, though domestic trading activity still lags expectations. The upcoming September Labour Force Survey and RBA Board meeting minutes will provide further insight into the recent interest rate decision.
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