 Building and construction numbers up
Construction figures are coming in above expectations much to the relief of housing industry insiders, builders and investors.
Although official construction figures for the June quarter showed minor falls in the amount of work done, the figures were actually still better than predicted.
The seasonally adjusted fall of 0.1 per cent in construction work completed during the three months to June might look discouraging, but because it has come in above expectations, many are surprised.
"This is a definite upside surprise for second quarter GDP," Westpac's senior economist Matthew Hassan told ABC News Online.
"We expected construction to detract 0.5 per cent from GDP, but it looks closer to neutral for the June quarter."
This new data shows that residential contruction only fell 2.6 per cent which was less than expceted, however commercial construction fell by 9.5 per cent.
The chief economist at the Housing Industry Association, Harley Dale, agrees.
"Low interest rates, the First Home Owner Boost, and Federal programs such as the Social Housing Initiative will all contribute to a much needed recovery in new home construction in 2009/10 following a five year trend decline," he said.
"It is clear, however, that residential projects are getting bogged down in the approvals process - the rate of increase in building approvals in 2009 to date is lagging considerably behind the strong surge we have seen in new home lending.
"That suggests the new home building recovery will be very modest to begin with and will not show up in earnest for construction work done until 2010."
Reserve Bank board member Roger Corbett has said he is confident that Australia's economy will not fall as much as previously feared and these figures are encouraging.
Within the housing industry, concerns have been raised over the capacity for property to remain in it's current form once the boost to the First Home Owners Grant is reduced.
If rising interest rates and rising unemployment threaten to hinder the recovery in residential building, the RBA may choose not to raise rates for a little while onger.
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