On a seasonally adjusted basis building approvals started 2019 in January with a small fall but on a trend basis (which is designed to smooth out seasonal adjustment fluctuations) approvals fell 3.2% in January to hit their lowest since 2013.
The data won’t influence today’s board meeting of the Reserve Bank except to confirm that its fears about the weakness of dwelling investment.
According to data released by the Australian Bureau of Statistics yesterday January’s fall was driven by private sector dwellings excluding houses (e.g. townhouses and apartments), which fell 8.1% in trend terms. Private sector houses also declined, by 0.4%.
“The trend for the total dwelling approvals series has steadily declined over the past year,” said Justin Lokhorst, Director of Construction Statistics at the ABS.
“The series is now at its lowest level since May 2013,” he pointed out in yesterday’s statement from the ABS.
Among the states and territories, total dwelling approvals fell in January in the Australian Capital Territory (19.8%), the Northern Territory (8.0%), Victoria (4.5%), Queensland (3.9%), New South Wales (2.3%) and South Australia (0.8%) in trend terms. Western Australia (2.2%) and Tasmania (1.4%) recorded increases.
Approvals for private sector houses fell 0.4% in January in trend terms. Falls were recorded in Queensland (1.4%), New South Wales (0.6%) and Victoria (0.3%), while increases were recorded in South Australia (2.3%) and Western Australia (0.2%).
The value of total building approved fell 1.5 percent in January, in trend terms, and has fallen for 14 months. The value of residential building fell 2.7 percent, while non-residential building rose 0.4 percent.
On seasonally adjusted basis approvals rose 2.5%, for an annual fall of 28.6%. Non private dwelling approvals rose 2.7% in January from December to be down 51% from a year ago. The rise was also due to a 28.8% jump in WA (local governments holding back). Private dwelling approvals rose 2.1% in January from December.
