Several data releases this week provided further insight into recent developments in the South Australian economy during May. They paint a generally positive picture of recent economic developments for the state but it has to be remembered that month to month movements for partial economic indicators can be quite volatile so need to be interpreted with caution.

Building Approvals
Building approvals data released on Monday provided some signs of further recovery in prospective building activity in South Australia. The trend estimate for the number of dwelling units approved rose by 1.6 per cent in May, which is their 7th consecutive monthly increase. However, approvals remain below their previous peak achieved in early 2016, with the number of approvals for May 2017 being 7.7 per cent lower compared to a year earlier.

In comparison, the number of dwelling units approved at the national level fell by 1.9 per cent in May 2017 and has fallen for three consecutive months. National approvals have fallen quite sharply over the past year (down 18 per cent). This decline has been broadly based, reflecting large falls for New South Wales, Victoria, Queensland and Western Australia. These outcomes point to market conditions cooling in eastern states after approval activity rose to robust levels through 2015 and 2016, and ongoing adjustment in Western Australia following cessation of the mining boom.

Retail Sales
Latest retail sales data for the month of May suggests that household spending continues to grow at a solid pace. The value of South Australian retail turnover in seasonally adjusted terms rose by 0.8 per cent in May, while national retail turnover rose by 0.7 per cent. Retail sales have grown more strongly for South Australia relative to national trends over the first 5 months of 2017, which is a surprising result given the apparent weakness in South Australian labour market conditions.

Overseas merchandise exports
South Australian merchandise (i.e. goods) exports also showed a solid improvement in May. The total value of overseas merchandise exports for the month rose by 7.2 per cent ($79 million) to be 39 per cent higher compared to a year earlier.

South Australian goods exports have been quite strong over recent months. The value of overseas merchandise exports for the 3 months to May 2017 was up $661 million or 24 per cent compared to the corresponding period a year earlier.

Unfortunately disaggregated commodity data was not available for May at the time of writing. However, data for earlier months indicates there has recently been solid growth in exports of copper, iron ore, vegetables, wheat and alcoholic beverages.