Building Approvals point to Dwelling Construction turning the corner in QLD by end of 2018

Today saw the release of the Building Activity data for the second quarter of 2017 and it shows dwellings under construction falling in QLD (in particular unit construction)…see the chart below from Stephen Gosarevski, Economist at CCIQ.

But as readers will know, the trend in residential building approvals in QLD has turned something of a corner and we have been looking at a reasonable recovery since late last year (see here for latest commentary). Not surprisingly, approvals are a leading indicator for actual construction work. As the chart below makes clear, that lead averages anything from about 7-10 months with turning points in approvals seeing similar shifts about 7 to 10 months later in dwelling construction.

Given the recovery in residential approvals started in QLD in Dec 2016, with the quarterly data turning upwards in March 2017, we can expect to see a similar recovery take hold in quarterly construction work by the final quarter of this year (assuming the recovery in approvals remains relatively intact).

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