Housing made positive contribution to Australian economy in quarter ended in March; future healthy contributions from residential building expected to be crucial to broader economic growth in 2014, 2015: Housing Industry Assn.

CAMPBELL, Australia , June 4, 2014 (press release) – ABS National Accounts for the March 2014 quarter highlight a positive contribution from housing to a healthy growth outcome for the Australian economy, said the Housing Industry Association, the voice of Australia’s residential building industry.

“In the context of what is often an emphasis on negative economic news in Australia, today’s GDP result is a stellar update for the Australian economy,” said HIA Chief Economist, Dr Harley Dale. “The momentum that the economy does or doesn’t maintain through the remainder of 2014 is obviously the key factor, but that shouldn’t prevent us from celebrating the strong start to the year that the aggregate Australian economy has clearly enjoyed.”

“Dwelling investment, an important leading indicator of wider domestic economic activity, has firmly taken its place on the positive side of Australia’s growth ledger,” said Harley Dale.

“Future healthy contributions from residential building will be crucial to broader economic growth in 2014 and 2015,” commented Harley Dale. “In this regard, updates we receive for leading indicators of residential building in coming months will be an important early guide to Australia’s likely economic growth pulse in 2014-15.”

In seasonally adjusted terms the chain volume measure of GDP grew by 1.1 per cent in the March 2014 quarter, delivering a heartening annual growth rate of 3.5 per cent. Barring the growth peak a couple of years ago attributable to the second round of the resources boom, that is the fastest annual growth rate since 2007.

Dwelling investment contributed 0.2 percentage points to the March quarter growth outcome, primarily due to new construction. In the March 2014 quarter new dwelling investment grew by 6.4 per cent to be up by 9.1 per cent in annual terms. Investment in alterations and additions, a series recently substantially revised by the ABS, increased for a second consecutive quarter in March, growing by 2.0 per cent to be 6.1 per cent higher compared to the March quarter last year.

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