Australian building approvals just logged the largest monthly increase in nearly a year.
According to the Australian Bureau of Statistics (ABS), total approvals surged by 10.9% to 18,453 in June in seasonally adjusted terms, breezing past expectations for an increase of 1.0%.
It was the largest percentage increase since July 2016.
Private sector approvals excluding houses — largely units — surged by a massive 20% to 8,534 over the month, helping to explain the strength in the headline approvals figure.
However, even with that increase, approvals in this category were still down 6.6% from a year earlier.
Approvals for private sector houses also registered a strong increase, lifting by 3.4% to 9,678 over the month. That saw the year-on-year increase turn positive, rising to 1.4%.
While some stunning results, it was largely due to volatility in apartment approvals, something that tends to influence the seasonally adjusted figures.
In trend terms — that which eliminates the impact of lumpy apartment approvals — the ABS said that approvals rose by just 0.1%, leaving them down 14.9% on a year earlier.
Over the same period, private house approvals fell by 2.8%, overshadowed by a massive 26.2% drop in dwelling approvals excluding houses.
So while the seasonally adjusted figure was spectacular, the trend remains lower thanks entirely to weakness in unit approvals.
House approvals, on the other hand, look like they’re strengthening once again — a good sign that the slowdown in the residential construction sector may not be as pronounced as previously thought.
Mirroring the surge in the seasonally adjusted approvals figure, the ABS said that the value of residential approvals increased by 5.5%, reversing a smaller drop of 1.3% in May. The value of non-residential approvals went the other direction, falling 2.6% after lifting in the previous two months.
Combined, the total value of approvals rose by 2.2% in seasonally adjusted terms, the third increase in succession.