According to data from the Australian Bureau of Statistics (ABS), home building permits in Australia unexpectedly increased in September, with a 1.5 per cent growth, as opposed to economists’ expectations of a 1 per cent decline.
The seasonally adjusted increase also meant a 0.2 per cent growth from the same month in 2016. The ABS said that the 18,849 permits in September represented the highest number since February. This bodes well for the construction industry, particularly for equipment suppliers, such as those offering Bobcat rubber tracks for sale.
The increase in building permits indicates a healthier economy in the future, as the added housing investments will positively affect the gross domestic product. Due to a stable pipeline of construction projects, the country’s housing market has been in a building boom for the fifth year.
This trend inadvertently caused an uptick in jobs, as well as sales of consumer products. Australia’s $1.7 trillion economy relies on the residential property market, as evidenced by its contribution of half a percentage point to economic growth since 2014. The market is so important that it serves as an indicator not just for the economy, but for interest rates as well.
The value of non-residential projects likewise increased 22.4 per cent in September. In seasonally adjusted terms, the ABS said the overall value of construction approvals increased 8.3 per cent.
Permits still reached below the peak figure in 2016, but the demand from a high population growth supports residential construction work. Low interest rates likewise help, as the Reserve Bank of Australia has maintained rates at 1.50 per cent for more than a year.
Specific issues remain, including subdued home price growth due to a higher supply and stricter investor lending policies. In the meantime, the current pace of approvals may suggest a rather bright outlook for the industry.