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Economy limping: job ads, building data

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SYDNEY, Feb 4 AAP

February 04 2013, 2:05PM

The economy limped into the new year, according to the latest pair of indicators.

The value of building approvals fell by two per cent for the third month in a row, seasonally adjusted figures from the Australian Bureau of Statistics (ABS) on Monday showed.

The $6.07 billion of approved projects - including $3.82 billion of residential and $2.25 billion of non-residential building - works out to a little less than five per cent of gross domestic product.

The average for the preceding 20 years was 5.75 per cent of GDP, so the level of building approvals compared with the size of the economy is about 16 per cent below normal.

The weakness in building and other sectors of the economy showed up in the monthly count of job ads by the ANZ, also released on Monday.

The number of ads on the internet and in newspapers fell by one per cent.

That was not a big fall on its own, but it was the tenth in a row and brought the number of jobs advertised to its lowest point in over three years.

In February 2012, when job advertising peaked after a short-lived recovery, the trend in employment growth according to the ABS was around 18,000 a month.

But, as the number of ads every month declined to be 20 per cent lower in January this year, that trend in employment growth has slowed to be only 7,000 a month at last count in December.

The January employment figures are due on Thursday and early responses to AAP's survey of economists suggests a consensus that unemployment will rise to 5.5 per cent from 5.4 per cent.

That would be consistent with an ongoing upward grind from the 4.9 per cent low reached at the end of 2010 in response to monetary and fiscal stimulus measures after the global financial crisis in 2008.

The economy is not on its knees by any means but the high Australian dollar and entrenched malaise in the building sector are making sure it's limping.

By Garry Shilson-Josling, AAP Economist