The Westpac recap of Aussie building approvals data from earlier:
- The driver was a sharp 14% pull-back in private sector ‘units’ (i.e apartments)
- Approvals in the segment off nearly 30% in three months, but prior to this though the segment had been strong
- Private sector house approvals showed a more moderate 0.3% decline in April with trend growth flattening out rather than falling.
- We suspect April approvals were affected by the timing of Easter in 2014 – the April labour force survey showed a notable 2.5% drop in total hours worked in the month that is broadly consistent with a high proportion of workers opting to take leave over the 3days between the Easter and ANZAC Day public holidays. The effective reduction in working days may have seen fewer approvals processed this April.
- While seasonally and holiday timing effects may be exaggerating some of these shifts, the is clearly an underlying moderation which recent weak reads on home buyer sentiment from the Westpac-MI Consumer Sentiment survey suggest will become a more pronounced weakening through the middle of the year. Note that for construction, this actual and prospective weakening in approvals is likely to be more of a factor for 2015 with lags in construction and the heavy concentration of high rise projects, which take longer to build, likely to see last year’s surge in approvals provide a longer last lift.
–
Meanwhile, AUD/USD is more-or-less on its session lows
