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 the month-to-month swings caused by volatile apartment numbers have continued, compounded by a large drop in house approvals.
Total May approvals were 3.2% lower than April’s revised total and lower than the median forecast of a flat result. However, on a 12-month basis and after revisions, total approvals were 3.1% higher than the same month in 2017 and higher than April’s comparable figure of 1.2% after revisions.
Bond yields had not moved by much in offshore markets and local financial markets were largely unreactive to the figures. By the end of the day, the yield on 3 year and 10 year bonds had both increased by 2bps to 2.07% and 2.63% respectively.