The notoriously volatile data set from the Australian Bureau of Statistics rose 18.5 per cent in December.
This follows three months in a row of lower council approvals, with the key indicator of future construction activity sinking 21.7 per cent between August and November.
ABS head of construction statistics Daniel Rossi said the December increase was led by a sharp rise in approvals for private sector dwellings excluding houses, with this category up 56.6 per cent.
"The result was driven by a number of large apartment developments approved in NSW and Victoria," Mr Rossi said.
But approvals for houses continue to decline, sinking 2.3 per cent over the month, with weakening property prices and high building costs weighing on home-building demand.
Troubling economic conditions have also been influencing business confidence and conditions.
Business conditions as sampled in NAB's quarterly business survey dropped five points in the December quarter but remained in positive territory at +18 index points.
Trading conditions, profitability and employment all declined but remained elevated based on historical averages.
Confidence fell off sharply in the three months to December as economic concerns intensified, sinking nine points to -1 index point.
NAB chief economist Alan Oster said leading indicators remained in reasonable shape despite the sharp fall in confidence.
"Expected conditions over the coming months have fallen somewhat but remain at strong levels, and forward orders were around long-run average levels in the fourth quarter," he said.
"That supports our view that, while the economy will likely soften considerably in 2023, at the moment firms don't see a major slowdown."
Labour shortages continue to be a top concern for businesses.
"Wage costs and availability of labour were once again the top issues affecting business confidence, reflecting the very tight labour market environment that businesses are facing."
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