Showing once again that Monetary policy works – at least for housing related industries – the ABS just released the January Building permits data, which rose 6.8% for the month and 34.6% in year on year terms.
The break up was solid as well: over the month private sector houses were up 8.3% seasonally adjusted, while other dwellings also rose a fairly strong 4.6%.
The key here for the RBA, which is looking for housing construction to gain traction and take some weight of increasing unemployment, is that the trend in private sector house has now been rising for 15 months.
So even though there are many signs that the Australian economy is still struggling to transition from mining investment to a broader recovery, the one sector the RBA is pinning its hopes on, housing construction, is doing the job expected of it.
The RBA will release the results of its Board meeting at 2.30pm today – they will be pleased by this data.