1 October 2002, 09:00  Australian Building Approvals Unexpectedly Gain 23.1% in August

Sydney, Oct. 1 (Bloomberg) -- Australian building approvals unexpectedly surged in August to the highest in eight years, signaling the housing market will underpin economic growth for longer than economists expected.
Building approvals for new houses, apartments and renovations rose 23.1 percent in August from a month earlier, the Australian Bureau of Statistics said. That followed a revised 2.7 percent drop in July. Economists expected a 2 percent decline, according to the median forecast in a Bloomberg News survey of 19 analysts.
A 30 percent surge in housing investment in the second quarter from a year earlier has been a key driver of economic growth. That helped the economy expand almost 4 percent annually, sheltering it from a global economic slowdown that has damped exports.
``The housing market is still strong and that's good for consumer and business confidence and household wealth,'' Michael Blythe, chief economist at Commonwealth Bank of Australia, said before the report was released. ``This will help hold up the domestic economy.''
The report comes as the Reserve Bank of Australia board meets today to decide on whether the strength in the domestic economy warrants an increase in interest rates. The central bank has raised the overnight cash target rate a half percentage point this year to 4.75 percent.
All 22 economists surveyed by Bloomberg News expect the central bank to leave its rate unchanged because of the threat to consumer confidence and economic growth from a global slowdown. Half of those surveyed expect a quarter percentage point rate increased before the end of the year.
Today's building report showed 17,554 new dwellings and renovations, worth A$4.67 billion ($2.53 bmillion), were approved by local government authorities in August. That money is still to be spent in the economy. The number of approvals was the most since August 1994.
Approvals for apartments and alterations to existing buildings rose 61.6 percent in August from the previous month. Approvals to build private houses gained 8.7 percent to the highest since February 2000.
Building approvals were 17.2 percent higher in August than a year earlier.

© 1999-2022 Forex EuroClub
All rights reserved