Building Approvals – Queensland has turned the corner (?)

Yesterdays Building Approvals numbers for July were another weak set of data across the nation. Seasonally adjusted approvals fell 9.7% m/m and are now down 28.5% y/y in Australia. The far less volatile (and much prefered) Trend series showed a decline of 3.2% m/m and a drop of 24.0% for the year. House approvals were down 15.4% y/y while units fell 35.0%.

However, as we highlighted a few months ago (see here) Queensland is looking more and more like we might have turned a corner. The seasonally adjusted data showed a 10.9% m/m jump although the year-on-year numbers are still down 22.3%. However, it is in the Trend series that we believe we see the true story emerging. Trend approvals rose 1.1% for the month (the 5th month of consecutive increases) and was down 22.1% for the year. Trend house approvals are down 19.8% y/y while units fell 25.8%. Given that this month’s 1.1% uptick is the best result of those 5 consecutive months it is certainly fair to say that the recovery is hardly roaring ahead. However, given the continued declines at the national level it is certainly clear that Queensland appears to be bucking the national trend; at least to some degree.

We will see the ABS original regional approvals data next week which we allow us to update our own Conus Trend estimate. To date we have seen very little sign of improvements across our region so we shall have to see if this (very) gradually improving story at the State level starts to be reflected at the more regional level in July.


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