Catherine Birch, senior economist at ANZ, notes that construction activity in Australia fell 0.4% q/q in Q3 2019 to be down 7.0% y/y and was the smallest decline since the downward trend began in Q3 2018.
Key Quotes
“Residential construction (-3.1% q/q) continued to fall although the Q2 result was revised up to -3.9% from -5.1%. The annual decline has stretched to -10.6%. New residential building fell 3.5% q/q while alterations and additions were flat at -0.1% q/q. New South Wales was responsible for almost three-quarters of the quarterly drop in total residential work done, but Victoria achieved a 1.5% q/q gain.”
“Non-residential building jumped 4.0% q/q with both the public (+3.7% q/q) and private (+4.1% q/q) sectors contributing. Activity has been volatile in 2019, but the uplift in approvals looks to be starting to translate through to work done.”
“The expected upturn in mining does not appear to be flowing through to work done numbers yet, with private engineering construction falling 4.6% q/q. Public engineering construction recorded a solid 6.4% q/q gain, but we still expect activity to dip in 2019-20 as some major projects wind down before others get underway.”
“Construction work done is the first of the GDP partials. The better-than-expected result paints a slightly more positive picture for Q3 GDP growth (Wednesday 4 Dec).”
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