“Construction activity will be very buoyant in 2010, ensuring solid activity levels for firms in building material, construction and engineering sectors,” said Craig James, an economist at the Commonwealth Bank.
Approvals to build new homes in Australia jumped a surprisingly strong 5.9 percent in November, further evidence of a construction boom that will increasingly foster growth.
Approvals for apartment blocks, a typically volatile sector that suffered during the crisis when funding dried up, led the way in November with a whopping 32 percent jump.
That lifted total building approvals by a third from November last year, the biggest rise in 7-1/2-years.
Activity in non-residential approvals was equally impressive, with the value of work up 53 percent during the month thanks largely to generous government stimulus spending on schools.
Analysts at Commonwealth Bank say the construction boom could last two to three years and add 2-3 percentage points to economic growth. This is without accounting for sizeable additional expenditure incurred by house buyers furnishing their new homes.
Indeed, the buoyant property market prompted the Reserve Bank of Australia to say last year it would be “disturbing” if low mortgage rates led only to higher home prices, which are already at record highs, and not more home building.
It has since raised rates for all three months between October and December, becoming the first of G20 central banks to tighten policy.
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