New figures from the Australian Bureau of Statistics (ABS) show there is a tentative recovery underway in the construction sector.
According to the ABS, building volumes in the final quarter of 2012 were up by 1.7 per cent on the previous quarter. This was driven by robust growth of 2.2 per cent in new house volumes.
“Taken with other data published recently, these figures indicate that a tentative recovery may be underway,” Housing Industry Association senior economist Shane Garrett said.
“It is encouraging that the actual volume of residential building work has increased for the second successive quarter following more than a year of declines. The fact that the pace of increase picked up supports the view that some momentum may be gathering in the sector. It is also welcome that growth is strongest in the most populous states.
“However, residential building activity was only marginally ahead compared with 12 months earlier."
Mr Garrett said this was largely due to the continued absence of growth in the area of alterations and additions.
“International developments since the middle of 2012 have been largely benign but uncertainties continue to plague demand. Furthermore, key sectors of the domestic economy are struggling with the strong value of the dollar,” Mr Garrett said.
“Nonetheless, fundamental factors indicate that the current level of residential building activity is below the economy’s long term demands. It is incumbent on policymakers to ensure that activity is guided back up to its appropriate level in a timely fashion.”