Lending finance; Weekly Petrol Prices
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Petrol prices have fallen
Lending soars. Total lending finance soared by 7.6 per cent in June, underpinned by a 12.1 per cent lift in business lending. Total new lending in June was $72.9 billion – the highest since January 2008.
- Petrol prices fall: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 1.0 cent per litre to 148.3 cents a litre in the week to August 10 – the lowest since the week to December 1 2013. The wholesale price continues to slide, hitting a near 9-month low.
What does it all mean?
- Lending has returned to levels prior to the global financial crisis. In fact, in original terms, lending totalled $84.1 billion in June 2014, the second highest total on record behind June 2007 ($90.8 billion). While growth is being driven by business lending, both personal and housing loans are well up on a year ago. Simply, consumers and businesses are embracing cheap financing. And hopefully in the case of business, some of the extra dollars are being put to work in new investment, in turn leading to the hiring of more staff.
- It may be hard to gauge given the discounting cycles in many capital cities, but there is good news for motorists. The pump price is at 8-month lows and the wholesale petrol price continues to slide, reaching levels last seen in mid-November last year. If the lower prices can be maintained, motorists will save around $13 a month on filling their cars with petrol. Simply the world is well supplied with petrol and global oil demand remains soft.
What do the figures show?
Lending Finance:
- Total new lending commitments (housing, personal, commercial and lease finance) rose by 7.6 per cent in June to a 6½-year high of $72.9 billion. It was the biggest lift in lending in 27 months.
- Housing finance: The seasonally adjusted measure of construction and new purchases rose by 1.8 per cent in June while alterations & additions rose by 2.2 per cent. Home loans are up 10.8 per cent on a year.
- Commercial finance: The seasonally adjusted series for the value of total commercial finance commitments rose by 12.1 per cent in June. Revolving credit commitments rose by 38.4 per cent, the fourth straight gain. Fixed lending commitments rose by 0.9 per cent. Business loans are up 29.4 per cent over the year.
- Personal finance: The seasonally adjusted series for the value of total personal finance commitments fell by 1.8 per cent in June after rising by 8.5 per cent in May. Revolving credit commitments fell by 3.3 per cent and fixed lending commitments fell by 0.6 per cent. Personal loans are still up 11.4 per cent over the year.
- In terms of fixed personal loans, car finance was up by 5.5 per cent over the year; debt consolidation rose by 2.6 per cent; refinancing rose by 7.7 per cent; loans to buy land rose by 18.6 per cent; and “other” loans were up by 18.0 per cent. Overall, personal fixed loans were up by 9.7 per cent over the year.
- Lease finance: Lending rose by 1.2 per cent in June but fell by 12.9 per cent over the year.
Petrol prices
- According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 1.0 cent a litre to 148.3 c/l in the week to August 3. The slide in prices reflected cyclical lows in the discounting cycles that exist in southern and eastern capital cities. The metropolitan price fell by 1.1 cents to 145.5 c/l, while the regional average price fell by 0.6 cents to 154.0 c/l.
- Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 3.0 cents to 140.9 c/l), Melbourne (up by 0.6 cents to 144.1 c/l), Brisbane (up by 4.1 cents to 149.8 c/l), Adelaide (down by 11.0 cents to 141.9 c/l), Perth (down by 2.5 cents to 148.3 c/l), Darwin (unchanged at 173.0 c/l), Canberra (down 0.1 c/l to 155.7 c/l) and Hobart (down 0.2 c/l to 160.5 c/l).
- Today, the national average wholesale (terminal gate) unleaded petrol price stands at 136.3 c/l, down around 2.5 cents over the week and the lowest level in almost nine months (November 18 2013).
- Last week the key Singapore gasoline price rose by just US6 cents to US$113.41 a barrel – just above the lowest levels seen in eight months. In Australian dollar terms the Singapore gasoline price rose by 70 cents barrel or 0.6 per cent last week to $122.66 a barrel or 77.14 cents a litre, just above the lowest levels seen in 8½ months.
- Figures from MotorMouth show that petrol prices in Melbourne and Brisbane hit the peak levels in the discounting cycle in the past few days. In Sydney, petrol prices have fallen for 28 days – well past the usual 12-14 days cycle. Adelaide petrol prices are near the lows, having fallen for 15 days.
- Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.
- Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
- The economy has healthy momentum, being provided by recovering consumer confidence, increased lending and solid home construction. While the environment is especially favourable for businesses dependent on home construction and purchase, the outlook is improving for equipment and services businesses and discretionary retailers. The drop in the price of petrol removes one potential source of angst from Aussie consumers.
Why is the data important?
- Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.
- Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
What are the implications?
- The economy has healthy momentum, being provided by recovering consumer confidence, increased lending and solid home construction. While the environment is especially favourable for businesses dependent on home construction and purchase, the outlook is improving for equipment and services businesses and discretionary retailers. The drop in the price of petrol removes one potential source of angst from Aussie consumers.