After a horror month in February, building approvals in Australia bounced back in March, the latest data shows.
Following an 8.8% fall in February, the seasonally adjusted number of new dwellings approved for construction throughout Australia increased by 7.4% in March, according to figures from the Australian Bureau of Statistics (ABS).
Not surprisingly, thanks to stronger numbers for multi-residential units, New South Wales, lead the way, recording a seasonally adjusted increase of 49.3% in March after experiencing a shocking drop in February.
Dwelling approval numbers were also up in Western Australia (11.1%) and South Australia (4.2%) but fell in Queensland (-8.7%), Tasmania (-6.7%) and Victoria (-5.0%).
Excluding the more volatile multi-residential sector, approvals for private sector houses rose by 3.9% (seasonally adjusted), with South Australia (16.3%), Western Australia (14.5%) New South Wales (3.5%) and Queensland (1.8%) all recording increases whilst Victoria recorded a 1.0% fall.
Still, compared with recent historic standards, the pace at which new residential building work is coming in remains slow. Despite the rise in March compared with February, the seasonally adjusted dwelling approval numbers remain 15.0% below levels seen twelve months ago in March 2011. Moreover, at 11,501, the overall number of dwelling units approved during March (seasonally adjusted) was the third lowest on record in the past two years.
In total, courtesy of a fall of nearly one-quarter in non-residential approvals, the overall dollar value of approvals for residential and non-residential buildings fell by 8.9% in March.
Much Needed News
Though not unexpected given February’s poor numbers, the increase in housing approvals in March has provided some much-needed positive news for the building and construction industry.
With recent data showing new home sales at ten year lows and construction industry activity shrinking at its fastest pace in seven months in April, news of late with regard to conditions in the building industry has been horrible.
In that context, many builders will welcome the anticipated boost to the industry from last week’s cut in interest rates.
Many eyes, too, will be on Tuesday’s federal budget and any impact it will or won’t have with regard to any impact it will have on business, household and public sector demand.