NO.093

LENDING FINANCE, AUGUST 2004

Data released by the Australian Bureau of Statistics on Lending Finance

for August 2004 shows that personal finance commitments fell by 3.5 per

cent in August to be 8.7 per cent lower over the past year. Total housing

finance commitments fell by 2.1 per cent in August to be 13.9 per cent lower

over the past year. Financial data released last month by the Reserve Bank

of Australia also show a slowing in the pace of growth of housing and personal

finance.

Indicators of retail trade and motor vehicle sales point to continuing

high levels of activity in these sectors, although growth is somewhat slower

than it has been over recent years, consistent with an easing in consumption.

Retail trade grew by 5.8 per cent in the year to August, somewhat below

the growth rates of more than 8 per cent recorded in late 2003 and early

2004. Motor vehicle sales in August 2004 were broadly unchanged from the

levels recorded a year earlier, following on from exceptionally strong growth

from 2001 to 2003.

With incomes remaining strong and consumption easing from high levels,

it may well be that households are strengthening their balance sheets. The

Government’s measures to assist families will provide a substantial

boost to household finances. The Government continues to place a strong

emphasis on economic reforms that contribute to growth in employment and

productivity as the best way to secure Australia’s economic future.

CANBERRA

13 October 2004

Contact:

Amanda Kennedy

0418 868 710