Aside from engineering and architectural design, one of the earliest requirements of a building project is to obtain approval from the relevant statutory body. 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 activity.
The latest building approval figures have been released by the Australian Bureau of Statistics and they indicate the downtrend which started in July has paused. Seasonally-adjusted, total approvals increased by 2.5% in January, which is over the market consensus figure of +1.5% and an improvement on December’s revised figure of -8.1%. However, on an annual basis, total approvals fell by 28.6%, as compared to December’s comparable figure of -22.0% after revisions.
Westpac senior economist Matthew Hassan said January’s figures should be treated with some caution. “As a rule, January housing data should be taken with a large grain of salt – the low flows through the holiday period mean any month to month noise is amplified by seasonal adjustment.”