The latest ABS figures on GDP show new home construction is a key positive, strengthening other parts of the economy.
The growth pulse of the Australian economy experienced a modest slowdown at the end of 2014 according to latest ABS figures on Gross Domestic Product, said the Housing Industry Association.
HIA chief economist Harley Dale says although the annual rate of growth of the Australian economy slowed in the December 2014 quarter, it wasn’t outside expectations.
“Clearly the aggregate situation is one of a relatively sluggish economy,” Dale said.
He said annual growth slowed from 2.7% to 2.5% at the end of last year, while the annualised rate of growth improved slightly from 1.4% to 2.0%.
“It’s important to recognise the good news and the new dwelling investment sector is part of that,” said Mr Dale, referring to its growth by 5.3% in the December 2014 quarter and 12.4% in the 2014 calendar year.
“The strength in national new home construction has fed through to other parts of the economy – household consumption, for instance, would be weaker if not for a strong new housing sector.”
“The divergence in economic conditions across states and territories is again clearly evident in today’s update on the nation’s economic growth.
Summing up the climate in each state, Dale said the NSW economy is “travelling well in a recovery that has been led by housing, while the Northern Territory ended last year in healthy shape.”
“Victoria lies in the middle of the pack, but the pace of economic growth is notably slower for South Australia, Tasmania, and the Australian Capital Territory. State final demand in Queensland and Western Australia was lower in the December 2014 quarter compared to a year earlier,” Dale said.