Building approvals are a useful leading indicator of economic activity so it was good to see the rebound in the ABS’s building approvals data for November (see chart below), possibly due to the Melbourne Cup day rate cut.

But, given approvals remain at relatively low levels, some commentators are pessimistic, as the Courier-Mail reports:

“The broad story here is that housing construction is still in trend decline,” said Paul Bloxham, chief economist at HSBC.

“We’d seen some strong declines in September and October and today’s result was a bit of a tick back after those declines, but looking through the volatility.”

Mr Bloxham said further interest rate cuts from the Reserve Bank of Australia might provide a boost for the housing industry.

I’m more optimistic than Mr Bloxham, particularly regarding the Queensland economy. Given these data today, and the retail trade data yesterday, I’m very confident Queensland will grow strongly over 2012 even if NSW and Victoria are flat.