Still waiting for building industry recovery

The Queensland building industry will continue to experience lean times over coming months with building approvals remaining significantly lower than they were before the financial crisis (see chart below based on today’s latest ABS data).

Approvals Jun 13While seasonally adjusted building approvals for Queensland grew 7 per cent in June, which might give some cause for optimism, as Pete Faulkner points out (Highly volatile units approvals push total down), the seasonally adjusted data have been bouncing around a lot lately.

MacroBusiness has good coverage of the disappointing national data (Dwelling approvals miss big) and I fully agree with the HIA, which commented today (see media release):

Building approvals data for June 2013 highlight the continued vulnerability of residential construction activity, said the Housing Industry Association, the voice of Australia’s residential building industry…

…For some time, we have been calling for structural impediments on housing activity to be reduced, including the taxation burden, excessive planning barriers and regulatory costs. The forthcoming election provides a real opportunity for solutions to these issues to be advanced,” concluded Shane Garrett.

While there are some positive signs for the building industry (e.g. housing finance commitments and lot approvals in some regions such as Ipswich), the industry will probably only experience a slow recovery, as forecast by BIS Shrapnel recently (see Building industry recovery to be slow).

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