“The RBA’s reduction in the cash rate to historic lows reflects the clearly slowing momentum in the broader economy and in particular in the labour market. Businesses and households will be looking to lenders to pass on the rate cut to borrowers in full and this would help deliver the maximum benefit for the economy as a whole,” Innes Willox, Chief Executive, Australian Industry Group, said today.
“As our data for the manufacturing, construction and services sectors have shown for some time, there are clear pockets of slowing demand as a result of drought, decline in housing construction, falls in house prices, tightening business credit, rising energy prices and concerns about global trade tensions. Today’s decision reflects those issues but there are few signs that activity across the board will suddenly pick up.
“Industry hopes today’s decision will provide the basis for renewed economic momentum,” Mr Willox said.