The Housing Industry Association (HIA) has said that preliminary ABS figures released recently indicate that residential construction activity improved slightly in the September quarter of 2012.

Residential building work completed in the September 2012 quarter improved by 0.9 per cent, there was also a lift in the volume of work on new detached dwellings of 0.5 per cent as well as a lift in the volume of work done on new multi-unit dwellings of 1.9 per cent.

The volume of work in the alterations and additions industry declined by 1.5 per cent. Combining the volume of building work done on new dwellings with work done on alterations and additions provides for a 0.6 per cent overall improvement across the industry.

HIA Economist, Geordan Murray said:

"It is good to see the aggregate volume of residential building work tick up by 0.6 per cent over the quarter following five consecutive quarters of decline,"

"However, despite the quarterly improvement, September still looks like being one of the weakest quarterly results in the last decade which highlights the length of the road back - the total volume of work done over the twelve months to September 2012 was 5.7 per cent lower than the same period in 2011."

"HIA has long held the view that the second half of 2012 is likely to represent a low point for residential building activity in the current cycle and there are tentative signs of this being the case," said Murray.

"On the monetary policy front, if the Reserve Bank are looking to residential construction to contribute to economic growth in 2013, today's result provides a lay-down-misere to cut the cash rate again at next Tuesday's board meeting and brighten the prospects of a decent recovery emerging," added Murray.

Further to the news that the residential construction sector improved, an economic report prepared for the HIA by the Centre for International Economics has quantified the significant national economic potential of increased activity from the residential construction sector.

For every dollar generated by a 1.0 per cent productivity increase in residential building, there will be an additional $4.19 of GDP created in the wider economy; a 1.0 per cent productivity increase in the residential building industry will generate an additional $863 million of GDP a year, in a constrained labour market.