Australian Manufacturing, Home Prices Fall

123jump.com Staff
02 Feb, 2009
New York City

Manufacturing in Australia declined in January as miners and supporting businesses shrink production. The sharp fall in the index shows a rapid widening of the slow down in the economy. A separate report showed that home prices in the last quarter ending in December declined in eight large cities.

[R]3:00AM New York, 7:00PM Sydney - Australian manufacturing shrinks for the eighth month in a row in January. Home prices drop 0.8% in December.[/R]

Australian market averages fell after a government report showed that the manufacturing sector continues to shrink. Another private report also indicated that house prices in the eight cities fell in the December quarter.

In Sydney trading ASX 200 index fell 1.2% or 43.3 to 3,497.40.

Of the ASX 200 index stocks, 53 gained, 128 declined, and 19 were unchanged. Henderson led gainers in the index shares with a rise of 17.7% followed by Mirvac Group advancing 10.9%.

Australian Manufacturing Eases in January

Australia Industry Group reported today that the Australian Industry Group PricewaterhouseCoopers Australian Performance of Manufacturing Index declines 2.9 points from December to 36.6 in January, reflecting a contraction.

According to the report, manufacturing shrank for the eighth consecutive month.

Ai Group chief executive officer Heather Rideout said current decline in new orders reflects the difficult conditions confronting manufacturers.

Businesses are reducing inventories and slashing production as conditions deteriorate. As a result, businesses are working on reducing inventories, leading to lower production and consequently putting further pressure on employment.

Home Prices Fall 0.8% in December

Statistics Bureau in Australia reported today that preliminary estimates show home prices of the eight cities fell 0.8% in the three months to December from a revised drop of 2.4% in the September quarter.

Declines were in Melbourne 1.7%, Brisbane 1.2%, Perth 0.9%, Sydney 0.3% and Hobart 1%, while increases were reported in Adelaide 0.3%, Canberra 0.7% and Darwin 1.6%.

The statistics bureau said prices for established house for the weighed average of eight capital cities declined 3.3% in the year to December.

Home prices increased on an annual basis in Darwin 3.8%, Adelaide 2%, but plunged in Perth 6.7%, Sydney 4.1%, Canberra 4.1%, Melbourne 3.2%, Hobart 3.1%, and Brisbane 1.4%.

Gainers & Losers

Henderson-CDI led gainers in the ASX 200 index shares with a rise of 17.7% followed by increases in Mirvac Group of 10.9%, in Fortescue Metals of 10.2%, in Dexus Property Group of 8.6%, and Goodman Group of 8.4%.

Fortescue Metals and other commodity stocks rose as gold prices increased $21.90 to $928 per barrel and oil prices edged up 25 cents to $41.7 per barrel.

Alesco Corp. led decliners in the ASX 200 index shares with a decline of 15.5% followed by losses in Tishman Speyer of 11.8%, in FKP Property Group of 8.9%, in Babcock & Brown of 8.3%, and IOOF Holdings of 7.9%.

Rio Tinto in Talks with Chinalco

Rio Tinto reported today that it is in talks with Chalco for a possible sale of assets worth up to $8 billion.

Chinalco is expected to take minority stakes in various operating businesses of the diversified miner and make also accept convertible securities from the company.