Australian markets experienced sharp falls in early trading today following the release of further bad news on the US economy overnight.
The S&P/ASX200 has fallen 1.3% on yesterday’s close to 5299.7 at 12.25pm, with most of that drop coming in the first 10 minutes of trading.
Weaker than expected factory forecasts for durable goods orders – down 1.7% in February – and a 1750 increase in the monthly average of new jobless claims, to a two-year high of 358,000, generated negative sentiment in the US overnight and helped push the Dow Jones Index down 0.97% to 12,302.46.
Quarterly GDP figures for the US also came in last night – the 0.6% figure for the last quarter of 2007 suggests the economy there was still growing, but only just.
The impact that the global financial crisis emanating from the US has on Australia is illustrated in national financial accounts for the December 2007 quarter released by the Australian Bureau of Statistics today.
Non-financial individuals and businesses took on $50.9 billion in credit in the three months to December 2007, a $8.6 billion fall on the previous quarter.
At that stage consumers hadn’t quite twigged to the coming storm – their borrowing increased by $13.1 billion – but borrowing by private businesses tumbled by a massive $20 billion as credit availability tightened.
Another constraint on business comes in the form of labour, and new data released yesterday suggest it has got harder to use overseas labour to address the problem.
According to new Government figures it now takes almost two months on average to process s457 visa applications to bring a new worker into Australia. Workers from low-risk countries had their visas processed in 55 days in 2006-07, up from 25 days the previous year, while s457 visas for people from high-risk countries took 84 days, up from 33 days in 2005-06.
And room occupancy rates for Australian hotels, motels and serviced apartments dropped 0.1% to 65.6% in the December 2007 quarter, according to new ABS figures.
It looks like it was the poorer travellers who didn’t come, however – despite the fall in occupancy rates, accommodation takings increased over the same period by 1.5% to almost $2 billion.