While the terms of trade may yet collapse, there is scant evidence of this at the moment.
The RPData house price series locked in the stellar house price momentum of the past two years – price rose a further 0.3 per cent in April for an annual rise of 11.7 per cent. While the April rise seems reasonably well contained, it follows a record monthly rise of 2.3 per cent In March. There seems little doubt that house price growth remains particularly strong.
The otherwise unremarkable AIG Performance of Manufacturing Index fell 3.1 points to 44.8 points. This reflects a mix of long run structural issues for manufacturing where low cost overseas competitors are likely to continue to negatively impact Australian business and related to that the difficult being imposed from the Australian dollar at current levels.
The net result of all of this information is that the economy is growing solidly and is likely to continue to do so for some time, or at least while ever the RBA holds interest rates at record lows.