AUSTRALIAN CONSUMERS CONTINUE TO SPEND.

Several of Australia's important consumer market sectors showed improvement at the end of 2004. In January 2005, Bloomberg reported that the services sector expanded at its fastest pace in two years. Retailing, recreation and property services all showed increases. Business services increased as well.

The performance of services index rose 5.9 points in December to 65.4. This index measures the activity of retailers and other service companies. Services account for two-thirds of the Australian economy.

The information was contained in an email report to Bloomberg News from the Commonwealth Bank of Australia and the Australian Industry Group. Index readings above 50 indicate that the services sector is expanding.

Australia's growth during 2004 was the slowest in 4 years. The strong showing of the services sector, plus a report on retail spending suggested to Bloomberg that Australia may be rebounding from its recent sluggish performance. Third quarter 2004 reports, for example, indicated that the economy grew only 0.3 percent. The disappointing news was blamed on declines in home building and exports.

Bloomberg quoted the Commonwealth Bank's chief economist to the effect that forecasts for orders and employment meant that services would be leading the economy's growth in 2005.

A separate report from Bloomberg News citing statistics from the Federal Chamber of Auto Industries said that new vehicle sales increased 1.5 percent in December.

With the addition of those December sales, 2004 became a record year for the Australian new vehicle sales. Toyota was the market leader for the second straight year and General Motors Holden was number two.

Auto sales in December 2004 were 78,980 units, up from 77,786 in the same month the year before. This made the year's total car unit sales 955,229. The Federal Chamber of Auto Industries had forecast sales of 960,000 units in 2004.

The increase in total year unit sales was 5 percent over 2003.

Sales of sport utility vehicles in December showed a 7.6 percent rise, and were up 14.9 percent on the year. Sales of passenger cars were down 2.3 percent in December but were up 0.3 percent on the year. Heavy commercial vehicles increased 20.1 percent in December, and 18 percent for 2004. Sales of light trucks went up 7.1 percent during the month, and rose overall 11.7 percent in 2004.

The housing sector was also reporting good news. The Housing Industry Association told Bloomberg that new home sales were up 7 percent in November over the previous month. This was the second month in a row sales of new homes increased. Sales of detached homes were up 11 percent in November. But sales of apartments declined 15 percent.

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