Australia's monthly inflation indicator once again came in at 2½ per cent over the year to January, right in the middle of the target 2 to 3 per cent range.
Source: ABS
This was a little lower than the median market forecast for an annual increase of 2.6 per cent.
Electricity prices were reported as being +8.9 per cent higher, largely due to the expiry of government subsidies in Queensland.
However, the disinflationary pulse does appear to be set in place for the housing sector.
Rents rose by +5.8 per cent over the year, well down from +6.2 per cent in December, and construction costs also appear to have levelled off since June 2024.
New dwelling price inflation slowed from +2.3 per cent to +2 per cent, which was the lowest annual result since June 2021.
Insurance costs were also up by a somewhat less extravagant +5.3 per cent over the year.
Given that these were some of the key drivers of inflation over the past 18 months, this is generally a positive sign for the inflation outlook.
Markets weren't a whole lot moved, with the Aussie dollar trading at 63.3 US cents, down from 63.5 cents earlier this morning, and the 3-year bond yield trading at 3.79 per cent.
Infrastructure boom continues
The latest construction work done figures showed something of an improvement for detached house construction in 2024, driven mainly by increased activity in Perth, Adelaide, and south-east Queensland.
The construction industry has been grappling with some capacity constraints over recent times, with hot population growth and a large pipeline of transport and mining projects being worked through.
Attached dwelling construction was mixed, but with an apparent improvement across 2024 in Sydney and New South Wales, where housing shortages have been particularly acute.
Engineering construction work done continues to be enormously strong, driven by resources projects in Western Australia and a vast pipeline of infrastructure in New South Wales, Victoria, and indeed most of Australia's states and territories.
Engineering construction work done has increased by well over 50 per cent over the past five years, approaching the heady heights of the resources construction boom in 2012, but this time driven as much by government investment and the tackling of the infrastructure deficit.
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