The ABS released its demographic statistics yesterday, which showed that Australia's population continued to boom dramatically by 405,446 persons in the year to September 2013 to 23,285,800, an annual increase of 1.8%.
For those familiar with the concept of compounding growth, it was interesting to note that the natural increase (births minus deaths) of 164,428 was the highest figure ever recorded in Australia.
The remainder of the growth of 241,018 was the net result of migration, accounting for nearly 60% of the growth (click chart).
The implication of this is that although natural increase is now at a record level, it is still immigration which is driving most of the growth.
As for where the population is growing fastest, see below (click chart)
The bulk of the growth as usual was seen in New South Wales (+108,100 y/y), Victoria (+110,500), Queensland (+83,700) and Western Australia (+76,300).
This is pretty much as expected while housing markets in the two most populous states remain so strong, although the population growth may tend to slow in those states when prices eventually reach a peak.
Population growth remained significantly weaker in South Australia (+15,300), Northern Territory (+4,300), the ACT (+5,900) and Tasmania (+1,200).
When considered on a percentage basis, Western Australia (+3.1%) remained by far and away the strongest state (click chart).
However, it is noteworthy that the rate of growth in WA has slowed somewhat from its peak (+3.7%), which is an expected effect of the mining construction boom passing its peak.
Queensland's percentage growth was also down a little due to net interstate migration, but this could equally turn out to be noise in the data.
I'm aware that people have suggested that Australia would not be able to stage a residential construction boom due to prohibitive land prices, but with dwelling prices now having experienced an uplift the stage is well set for precisely that.
Dwelling approvals are at decade highs and rising, and the significantly increasing levels of construction in Sydney are already easily visible.
In fact, at a conference in Hong Kong this week, the Reserve Bank Governor Glenn Stevens stated confidently:
"We are going to have a boom in residential construction over the next couple of years. That is very much on track."
He appears most likely to be right, and while I'm aware that Sydney is not Australia, it's definitely underway here thanks to an uplift in dwelling prices and low interest rates.
While the value of residential construction in itself not remotely likely to plug the hole left by the mining construction boom, the combined effect of low interest rates, rising residential and commercial real estate construction, higher levels of services activity, strong retail sales and booming export volumes all look set to keep the economy ticking along.
The boom in Sydney's construction is already having a tasty impact on the local economy, with retail sales taking off and tax revenues to follow, while building materials companies are enjoying some time in the sun:
Captital city construction and new homes also need new infrastructure: hospitals, schools, shopping centres, cafes, restaurants, service stations and more, so the impact should on our major cities be multiplied over time.
The challenge facing Australia is to keep GDP per capita growing at a fair rate and not only real GDP.
As if to re-emphasise the point, I was out at Sydney's Olympic Park yesterday for the first time since the mighty Sydney Roosters won the NRL Premiership, and...yes, yet more construction.
And more rain.