Activity picks up in RBA absence

AAP

CONSUMER activity perked up in July in the absence of further interest rate increases by the Reserve Bank, with both retail spending and building approvals proving stronger than expectations, new data shows.

However, demand for credit remained sluggish.

Consumers spent a record $20.4 billion in July, a 0.7 per cent seasonally adjusted increase on the previous month, and nearly double the growth economists had forecast.

The Australian Bureau of Statistics also said on Tuesday that building approvals rose 2.3 per cent to 13,732 units in July, ending a three-month run of declining growth.

Economists had forecast a 0.7 per cent decline in approvals.

But at the same time, the Reserve Bank said demand for credit grew just 0.1 per cent in July when economists had expected a 0.3 per cent increase.

Housing credit remained the main driver of credit demand, rising 0.5 per cent in July, but other personal credit was flat, while business credit fell by a further 0.4 per cent.