- Michael Workman, a senior economist at Commonwealth Bank
Australian residential building approvals unexpectedly recorded their best month on record in November, a trend that promise to boost economic growth in the South Pacific country. The number of Australian home-building permits issued soared 7.5% to 18,245 units from October, the Australian Bureau of Statistics reported. Analysts, however, had expected building consents to fall 2.7% in November. On an annual basis, approvals to build new homes surged 10.1%. Australia's construction sector has expanded over the last two years, driven largely by historic low borrowing costs and accelerating house-price inflation in Australia's biggest cities. Interest rates have stayed at 2.5% for almost a year and a half, as the Reserve Bank of Australia tries to underpin economic activity in non-mining sectors. Progress has been slow so far as the nation's economy continues to grow at a below-average pace and jobless rate rises. The GDP growth slowed to 2.7% in the year to September, and short of the 3 to 3.25% pace, which is seen as "normal" in Australia, prompting debate among economists that the central bank may be forced to cut rates further to support growth and, in particular, building activity, a substantial employment generator.
The construction data will cheer the RBA up, which has been relying on residential construction to create jobs as work on mining projects winds down.
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