EXPLANATORY NOTES


INTRODUCTION

1 This publication contains preliminary estimates from the quarterly Building Activity Survey of the number of dwelling units commenced during the current quarter and revised estimates for the previous two quarters. More comprehensive and updated results will be available shortly in Building Activity, Australia (cat. no. 8752.0).


SCOPE AND COVERAGE

2 The statistics were compiled on the basis of returns collected from builders and other individuals and organisations engaged in building activity. From the June quarter 2005, the quarterly survey consists of:

• a sample survey of public and private sector residential building jobs valued at $50,000 or more
• an indirect component based on building approval details for all residential building work approved from $10,000 to less than $50,000.

3 Building jobs included in each quarter in the Building Activity Survey comprise those jobs selected in previous quarters which have not been completed (or commenced) by the end of the previous quarter and those jobs newly selected in the current quarter. The population list from which jobs are selected for inclusion comprises all approved building jobs which were notified to the ABS (refer paragraph 2) up to but not including the last month of the reference quarter (i.e. up to the end of August in respect of the September quarter survey). This introduces a lag to the statistics in respect of those jobs notified and commenced in the last month of the reference quarter (i.e. for the month of September in respect of the September quarter survey). For example, jobs which were notified as approved in the month of June and which actually commenced in that month are shown as commencements in the September quarter. Similarly, building jobs which were notified in the month of September and which actually commenced in that month are shown as commencements in the December quarter.

4 The use of sample survey techniques in the Building Activity Survey means that reliable estimates of the number of dwelling commencements are generally available only at state, territory and Australia levels. Although subject to higher relative standard errors, a range of sub-state estimates of dwelling commencements may be available. Detailed data on Building Approvals, based on information reported by local government and other reporting authorities, are available for regions below state and territory level from Building Approvals, Australia (cat. no. 8731.0).


CLASSIFICATION

5 Ownership. The ownership of a building is classified as either private sector or public sector, according to the sector of the intended owner of the completed building as evident at the time of approval. Residential buildings being constructed by private sector builders under government housing authority schemes whereby the authority has contracted, or intends to contract, to purchase the buildings on or before completion, are classified as public sector.

6 Building jobs (and their related dwellings) are classified both by the Type of Building (i.e. 'house', 'other residential building') and by the Type of Work involved (i.e. 'new' and 'conversions, etc.'). These classifications are used in conjunction with each other and their categories are defined in the Glossary.


RELIABILITY OF THE ESTIMATES

7 Since the estimates are based on a sample of approved residential building jobs, the estimates of commencements of dwellings and total dwellings are subject to sampling variability. Relative standard errors give a measure of this variability and therefore indicate the degree of confidence that can be attached to the data.

8 Estimated relative standard errors for the number of dwellings commenced in the September quarter 2010 are given below. There is 67% confidence that the actual number would be within one standard error of the sample estimate, and 95% confidence that it lies within two standard errors.

Relative Standard Errors, September quarter 2010
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Aust.
	%	%	%	%	%	%	%	%	%
New private sector houses	4.5	3.6	3.6	5.1	6.0	3.7	4.3	4.5	2.0
New other residential dwellings	4.5	3.4	6.8	7.5	11.2	9.7	-	2.6	2.3
Total dwellings	3.2	2.6	2.8	3.7	5.2	3.8	1.2	2.6	1.4
- nil or rounded to zero (including null cells)

9 In addition, some returns containing jobs not known to have commenced are not received in time for inclusion in these estimates. Allowance is made for a proportion of these jobs, based on past experience, likely to have commenced. Estimates in this issue for the last two quarters are therefore subject to revision.


SEASONAL ADJUSTMENT

10 Seasonally adjusted building statistics are shown in tables 1-4. In the seasonally adjusted series, account has been taken of normal seasonal factors, ‘trading day’ effects arising from the varying numbers of working days in a quarter and the effect of movement in the date of Easter which may, in successive years, affect figures for different quarters.

11 Since seasonally adjusted statistics reflect both irregular and trend movements, an upward or downward movement in a seasonally adjusted series does not necessarily indicate a change of trend. Particular care should therefore be taken in interpreting individual quarter-to-quarter movements. The seasonally adjusted series for total dwellings for Australia and each state and territory has been produced by summing the respective seasonally adjusted series for each of 'new houses', 'new other residential dwellings' and 'conversions, etc.' However, the states and Australia are adjusted independently, which means that the sum of the adjusted state series may not add to the adjusted Australian total.

12 From the June quarter 2003, the seasonally adjusted estimates are produced by the concurrent seasonal adjustment method which takes account of the latest available original estimates. The concurrent seasonal adjustment methodology replaces the forward factor methodology previously used, when seasonal factors were only revised following an annual re-analysis. The concurrent method improves the estimation of seasonal factors and, therefore, the seasonally adjusted and trend estimates for the current and previous quarters. As a result of this improvement, revisions to the seasonally adjusted and trend estimates will be observed for recent periods. In most instances, the only noticeable revisions will be to the previous quarter and the same quarter of a year earlier.

13 A more detailed review of concurrent seasonal factors will be conducted annually, generally prior to the release of data for the December quarter.

14 As a general rule, caution should be used when using the seasonally adjusted series for dwelling unit commencements in Northern Territory and Australian Capital Territory. The small numbers and volatile nature of these data makes reliable estimation of the seasonal pattern very difficult.


TREND ESTIMATES

15 Seasonally adjusted series can be smoothed to reduce the impact of the irregular component in the adjusted series. This smoothed seasonally adjusted series is called a trend series.

16 The trend estimates are derived by applying a 7-term Henderson moving average to the seasonally adjusted series. The 7-term Henderson average (like all Henderson averages) is symmetric but, as the end of a time series is approached, asymmetric forms of the average are applied. Unlike weights of the standard 7-term Henderson moving average, the weights employed here have been tailored to suit the particular characteristics of individual series.

17 While the smoothing technique described in paragraphs 15 and 16 enables trend estimates to be produced for recent quarters, it does result in revisions to the estimates for the most recent three quarters as additional observations become available. There may also be revisions because of changes in the original data. For further information, see Information Paper: A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0) or contact the Assistant Director, Time Series Analysis on Canberra (02) 6252 6540 or email <timeseries@abs.gov.au>.


ACKNOWLEDGMENT

18 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


RELATED PRODUCTS

19 All tables in this publication are available in electronic form on the ABS web site.

20 Users may also wish to refer to the following publications:

Building Activity, Australia, cat. no. 8752.0
Building Approvals, Australia, cat. no. 8731.0
Construction Work Done, Australia, Preliminary, cat. no. 8755.0
House Price Indexes: Eight Capital Cities, cat. no. 6416.0
Housing Finance, Australia, cat. no. 5609.0
Private Sector Construction Industry, Australia, cat. no. 8772.0
Producer Price Indexes, Australia, cat. no. 6427.0.

ABS DATA AVAILABLE ON REQUEST

21 As well as the statistics included in this and related publications, the ABS may have other relevant data available on request. Inquiries should be made to the National Information and Referral Service on 1300 135 070.