Economists said the Victorian building industry outperformed the other states as the struggling sector looked to claw its way back following a disastrous period in 2011.

Despite the home construction resurgence, the Reserve Bank is tipped to cut interest rates next month in a bid to boost household spending and consumer confi dence.

The Australian Bureau of Statistics housing data for November released yesterday showed building approvals climbed 8.4 per cent following dives of more than 10 per cent in the previous two months.

This was led by a stunning 44 per cent rise in apartment and house construction in Victoria.

NSW was up 2 per cent and Queensland 6.6 per cent, with the increases leading to cautious optimism among industry leaders  that the sector has begun to turn around. But a full recovery is not expected until the second half of 2012 with the data for November about 18.9 per cent down on the year before.

"November is a bigger rebound than what we expected, it's great news for the industry in Victoria," HIA chief economist Andrew Harvey said.

"There has been a backlog of work in Victoria, a lot of builders have had enough to keep them going which has made it stronger than other states."

In Victoria unit construction surged from a near-record low of 900 in October to 1700 in November, with housing starts climbing from 2436 back to 2777 in November.

HSBC economist Paul Bloxham expects mining to continue to drive economic growth. But he said residential construction was set for a modest recovery as interest rates cuts are expected to make building more attractive.