Aside from engineering and architectural design, one of the earliest requirements of a building project is to obtain approval from the relevant statutory body. As a result, building approvals data is a leading economic indicator of future construction. While not all projects which have been approved are completed, all completed projects have been granted approval. Approvals data thus provides a useful indicator of future construction.
The latest building approval figures have been released by the Australian Bureau of Statistics and they indicate total approvals continue to be volatile from month to month. Total February dwelling approvals were 6.2% lower than January’s revised total and slightly lower than the median forecast of -5%. On a 12 month basis and after revisions, total approvals were 3.1% lower.
ANZ senior economist Daniel Gradwell said the figures had positive implications for housing construction for the rest of this year, despite their see-sawing nature. “With the volatility present in this series it is important to look at the underlying trends, and overall approvals are still sitting at elevated levels. We expect the backlog of work already under construction will keep dwelling investment solid through 2018.”