Building Approvals data shows the upswing is running out of steam

The upswing that we’ve been seeing in Building Approvals appears to be coming to a rather abrupt end. The data for Sept shows nationwide approvals fell by 11.0% for the month and by 13.4% for the year. However, these seasonally adjusted figures are often very “lumpy” because of the impact of unit approvals (large unit developments will see a big number added in any one month). In Sept house approvals were actually down only 3.0% while unit approvals fell 21.4% after a 8.2% increase the previous month.

The  less volatile Trend series from the ABS shows approvals unchanged for the month and up 1.0% from a year ago. It is that data that we should be looking at and what it shows us is a marked slowing (indeed a virtual halt) to the approvals growth we had been witnessing.

The story in Queensland is slightly more positive. Seasonally adjusted data showed total approvals down 8.0% on the month for a year/year decline of 3.6%. In Queensland all the decline can be slated to unit approvals while house approvals actually rose 0.7%. The Trend data shows approvals up 0.8% m/a for a 3.0% increase on the year. As the chart below makes clear, the recovery in Queensland has continued although, with downward revisions to previous months, it is clear that the pace has slowed markedly.

Regional building approvals will be released by the ABS next Monday.

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