Building activity - nothing too exciting

Value of building work done: up +6% y/y for new residential building.

Up a bit, but still not enough.

Graph: Value of work done, Chain volume measures—Trend estimates

Source: ABS

Dwelling units commenced: up a promising 13% on a year ago, but scored a miss this quarter.

Possibly a volatile data set, but not a great result this time around.

Graph: Dwelling units commenced

Source: ABS

Private dwellings commenced: units and apartments +21% year-on-year, but the quarterly figures are all over the place and down sharply this quarter. 

Far less of an increase for houses, only being +5% y/y.

Graph: Private dwellings commenced, Trend estimates

Source: ABS

Overall, you could make a case for there being an uptrend in activity over the past year, but it wouldn't be a particularly convincing one.

Residential building activity is especially vital for Australia for two reasons.

Firstly, because the Reserve Bank is relying upon an increase in activity to rebalance the economy away from mining construction.

And secondly, because Australian city population growth is so high, as detailed here by Michael Matusik:

"Those urban places that saw over 4,000 new heads (above ground) during 2012 include:

Melbourne (77,000 increase); Perth (65,000); Sydney (62,000); Brisbane (43,000); Adelaide (14,000); Gold Coast (11,000); Canberra (7,000); Sunshine Coast (5,000); Newcastle (5,000) & Townsville (4,000).

These top ten growth cities hold four-fifths of Australia’s population growth.  Our eight capital cities combined make up 70 per cent of the country’s population growth."

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