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Non-bank loan growth at 9½-year highPrivate sector credit; Petrol prices; New home sales; Chinese economic data
Lending & money: Private sector credit (effectively outstanding loans) rose by 0.5 per cent in March after a 0.4 per cent rise in February. Annual credit growth rose to 5.1 per cent in March. Loans and advances by non-bank financial intermediaries rose by 7.1 per cent in the year to March (fastest rate in 9½ years).
Petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 5.0 cents to 146.6 cents a litre in the past week – the highest level in 3½ years.
New house sales decline: In seasonally-adjusted terms, new detached house sales fell by 2 per cent in March. Sales fell by 2.2 per cent during the March quarter and by 4.1 per cent over the year. 
China purchasing managers indexes: The National Bureau of Statistics’ manufacturing purchasing managers’ index fell by 0.1 point to 51.4 points in March, above market forecasts for 51.3 points. The services gauge rose by 0.2 points to 54.8 points, above consensus expectations for 54.6 points in March. Results above 50 points imply expanding activity. 
What does it all mean?
Micro banks and non-bank financial institutions are growing in popularity, increasing competition in the Aussie lending market. The unique ‘fintech’ approach offers small and medium-sized enterprises with increased flexibility and quicker access to financing.
Non-bank and credit union lenders often raise funds privately, typically have lower loan application requirements and turn around applications quickly. And it appears that small Aussie businesses seeking funding from non-bank financial institutions is growing. According to the latest data from the Reserve Bank, the value of loans and advances by non-bank and credit union institutions rose to near decade highs of $145.2 billion in March.
In a welcome development business borrowing picked-up in March. Non-mining business investment is the best in nearly a decade. But corporate profits are elevated and businesses seem more content hoarding cash on their balance sheets and paying-out dividends in preference to taking on more debt.
The school holidays are over in New South Wales and the school run re-commences today with petrol prices in Sydney back near $1.50 per litre at some petrol stations. Rising petrol prices are pressuring Aussie household budgets.
The Nymex oil price is up by 12.7 per cent so far this year and is currently trading at around US$68.10 per barrel. Rising geo-political risks in the Middle East, supply outages in Venezuela and Angola, and OPEC supply restraint are placing upward pressure on oil prices.
The Singapore price of unleaded petrol is the key regional petrol benchmark for Australia. Australia imports refined products from Singapore and South Korea to meet demand. Last week the Singapore gasoline price hit US$84.20 a barrel – the highest level since 21 June 2015.
What do the figures show?Private sector credit
Private sector credit (effectively outstanding loans) rose by 0.5 per cent in March after a 0.4 per cent rise in February. Annual credit growth rose to 5.1 per cent during March, after the annual rate held at 4.9 per cent from December through to February.
Housing credit grew by 0.5 per cent in March after a similar gain in January and February. But annual growth eased from 6.2 per cent to 6.1 per cent – the equal lowest growth rate in almost four years.
Owner occupier housing credit rose by 0.6 per cent in March to stand 8.1 per cent higher over the year – a 16-month high.
Investor housing finance lifted by 0.2 per cent in March with annual growth easing to an 1 -month low of 2.5 per cent.
Personal credit fell by 0.1 per cent in March to be down 1.0 per cent over the year.
Business credit rose by 0.8 per cent in March – its largest monthly increase in nine months. Annual growth rose by 4.2 per cent, up from 3.6 per cent in February.
Both M3 and Broad Money rose by 0.4 per cent in March. M3 is up 3.7 per cent on the year (25-year low) and Broad Money is up 3.8 per cent on the year (24-year low).
Term deposits with banks fell by $0.9 billion to $581.3 billion in March. Annual growth rose from 3.2 per cent in February to 3.4 per cent in March.
Loans and advances by banks grew by 5.4 per cent in the year to March – up from 5.1 per cent in January and February. And loans and advances by non-bank financial intermediaries rose by 7.1 per cent in the year to March (fastest rate in 9½-years).
New home sales
In seasonally-adjusted terms, new detached house sales fell by 2 per cent in March. Sales fell by 2.2 per cent during the March quarter and by 4.1 per cent over the year.
The Housing Industry Association reported that the volume of detached house sales fell in South Australia (down 11.4 per cent); NSW (down 10.2 per cent) and Victoria (down 7.2 per cent). However, sales rose in Western Australia (up 26.2 per cent) and Queensland (up 2.7 per cent) during March.
No data was published by the HIA for multi-unit sales.
Petrol prices
According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 5.0 cents to 146.6 cents a litre in the past week – the highest level in 3½ years.
The metropolitan petrol price rose by 6.2 cents to 146.4 cents per litre and the regional price increased by 2.3 cents to 146.9 cents per litre. The gross retail margin rose from 13.2 cents to 17.4 cents.
Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 4.7 cents to 142.9 c/l), Melbourne (up by 13.4 cents to 149.9 c/l), Brisbane (up by 11.1 cents to 153.9 c/l), Adelaide (down by 13.0 cents to 134.5 c/l), Perth (up by 1.9 cents to 141.6 c/l), Darwin (up by 1.0 cent to 149.7 c/l), Canberra (up 0.1 cents at 148.4 c/l) and Hobart (up by 1.3 cents to 150.1c/l).
The national average Australian price of diesel petrol rose by 1.5 cents to 144.2 cents per litre. The metropolitan price rose by 1.6 cents to 144.1 c/l and the regional average price rose by 1.4 cents to 144.2 c/l. 
Today, the national average wholesale (terminal gate) unleaded petrol price stands at 129.2 cents a litre, up by 0.8 cents over the week. The terminal gate diesel price stands at 132.0 cents a litre, up by 1.3 cents over the past week.
Last week the key Singapore gasoline price rose by US$2.00 or 2.4 per cent to US$84.20 a barrel. In Australian dollar terms the Singapore gasoline price increased by $5.04 or 4.7 per cent to $111.60 a barrel or 70.19 cents a litre – the highest level in almost 3½ years.
MotorMouth records the following average retail prices for capital cities today: Sydney 150.4c; Melbourne 147.8c; Brisbane 152.5c; Adelaide 130.1c; Perth 131.9c; Canberra 148.0c; Darwin 150.4c; Hobart 150.4c.
What is the importance of the economic data?
Private sector credit figures are released by the Reserve Bank on the last working day of the month. Credit is separated into three categories – housing, other personal and business. Private sector credit is effectively the amount of loans outstanding in the economy. If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive.
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 Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia’s largest 100 home builders. The survey covers around 15 per cent of the home building industry.
China’s National Bureau of Statistics releases its monthly economic statistics around mid month. Quarterly GDP data is released around the 19th of January, April, July and October. China’s Customs Office releases trade data, and the People’s Bank of China releases financial statistics, around the 10th of each month. China is Australia’s largest trading partner and changes in the Chinese economy have major implications for the Aussie economy.
What are the implications for interest rates and investors?
Housing credit growth continues to stabilise amid cooling conditions in the Sydney and Melbourne housing markets.
The bank regulator APRA is clearly comfortable enough with its ‘engineered’ investor-led housing slowdown. Last week it removed the 10 per cent cap on growth in outstanding investor loans. Owner-occupiers have ‘filled the gap’ somewhat with growth rate in credit now the highest in 16 months.
And business credit is showing signs of life after a period of weakness. Is this the much-awaited inflection point?
Petrol prices are increasing inflationary expectations globally. Longer-dated bond yields are rising as crude oil prices increase. The ‘new normal’ for petrol prices across Australia appears to be $1.50 per litre. The pain continues for motorists.
Chinese economic activity remains firm and domestic demand is strong on the back of the Chinese consumer. Little wonder that Australia has recorded a trade surplus in nine out of the past ten months.
CommSec expects interest rate settings to remain on hold for at least the next six months.
Published by Ryan Felsman, Senior Economist, CommSec