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--Worries About Dwelling Construction Being Detraction to GDP Growth
By Sophia Rodrigues
     SYDNEY (MNI) - Dwelling approvals in Australia fell for the second straight
month in May, pushing trend into negative for seven straight months and raising
concerns about dwelling construction being a detraction to GDP growth sooner
than expected.
     The Reserve Bank of Australia's current view is that the dwelling
investment pipeline should continue to support a high level of dwelling
investment for some time yet. But this might change when the view on the economy
is updated for the quarterly Statement on Monetary Policy in early August.
     Data published by the Australian Bureau of Statistics Tuesday showed
dwelling approvals fell 3.2% m/m in May, defying MNI median forecast for a 2.0%
m/m rise, though this masked forecasts by two economists for up to 4% fall.
     The latest fall was due to a 8.6% m/m fall in house approvals, the biggest
drop since a 11.8% decline in May 2015. Multi-units approvals rose 4.3% m/m,
rebounding partly from a 14.0% fall the month before.
     Significantly, trend approvals fell 1.5% m/m in May, and has declined for
seven straight months. At 1.5%, trend approvals stood at the worst level since
December 2016. 
     In value terms, total buildings approved fell for the third straight month,
down 0.1% m/m in May after a 3.7% fall in April. The value of residential
building approved fell 0.3% while the value of non-residential rose 0.4%.
     From building approvals data for May published by the Australian Bureau of
Statistics on Tuesday:
                                               May                         April
                              (M/M% unless stated;          (M/M% unless stated;
                              seasonally adjusted)          seasonally adjusted)
Dwelling Units
Approved                                      -3.2       -5.6(revised from -5.0)
MNI Median                     +2.0 (-4.0 to +5.0)
Dwelling Units
Approved (Trend)                              -1.5      -1.4 (revised from -0.1)
Dwelling Units
Approved Y/Y                                  +3.1    +1.9(last month's release)
Private Houses                                -8.6                          +1.4
Private Units
Excluding Houses                              +4.3                         -14.0
--MNI Sydney Bureau; tel: +61 2-9716-5467; email:

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