Apartment, house building boom failing to offset mining bust
Activity in the Australian construction sector has fallen for the third quarter in succession, as the residential and commercial building sectors struggle to pick up the slack from work winding up on big resources projects.
The overall value of construction fell 2.6 per cent in the March quarter to be 6.7 per cent lower over the year.
The deceleration was far sharper than the consensus market view of a 1.5 per cent fall and follows a 3.6 per cent slump in the December quarter.
Residential construction was the only area exhibiting growth, up 1.5 per cent over the quarter and 5.7 per cent for the year, although this was weaker than the 2.5 per cent growth in December quarter.
Overall building construction was down 1 per cent in the quarter, dragged down by a particularly disappointing 5.5 per cent slump in non-residential construction.
This is significant slowing in building activity following on from 2.7 per cent growth in the previous quarter, where non-residential building (such as office blocks, shopping centres, factories and warehouses) was up a solid 2.5 per cent.
On annualised basis, construction - excluding big engineering projects - grew at 1 per cent compared to 8 per cent growth three months earlier.
Engineering construction – which takes in the big resources projects – continued its rapid slowdown, as expected, falling 4.2 per cent for the quarter to be almost 13.7 per cent lower compared to the same time last year.
However, the fall was not as dramatic as the previous quarter and goes some way to support the Reserve Bank's view that the slowdown in mining construction may have bottomed out in the first half of the year.
On the housing side, it appears that the strong momentum of the previous two quarters has eased somewhat and conditions may have softened following a drop in housing approvals earlier this year.
Source ABC News