Amongst the hullabaloo of today’s strong jobs data another piece of amazing data was released by the Australian Bureau of Statistics which shows how strong the recovery in housing is at the moment.
According to Craig James at Commsec the dwelling commencements data showed a rise of, “12.5 percent in the September quarter to a record high of 52,380. Houses rose by 0.8 per cent and apartments rose by 31.3 per cent. Work started on a record 192,636 new dwellings over the year to September, up 17.4 percent on the previous year.”
September building activity data might be a little historic but the strength of building approvals, particularly in units which continue to grow strongly, suggest that construction is at and will stay at record highs in 2015.
That’s important for the economy according to James who said: “Home building is a big job creator and construction has multiplier effects through the economy.”
But unlike the ANZ which this morning said it believes the RBA will lower rates twice in the next 4 months it is Commsec’s view that with the job market improving, the Aussie dollar lower and petrol prices “supporting consumer spending and working to trim business costs,” there are few reasons for the RBA to move off the interest rate sidelines.
James sounds like he is firmly in the no rate cut camp.