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Australia: Cooling construction activity in Q1 2019 – Westpac

Andrew Hanlan, analyst at Westpac, points out that Australian construction sector experienced a further cooling of conditions in early 2019, with construction work contracting for a third consecutive quarter, falling by: -3.6% in Q3 2018; -2.1% in Q4; and -1.9% in Q1 2019.

Key Quotes

“The March quarter outcome fell short of expectations, which were for a consolidation (market median flat and Westpac +0.2%).”

“With the construction sector accounting for about 14% of the economy, this result will subtract in the order of 0.25ppts from activity in the quarter (depending upon how these quarterly partials flow through to the national accounts).”

“The key surprises were: (1) the softness in public works, despite a sizeable work pipeline; and (2) a further wind down of private infrastructure activity, despite the recent lift in commencements and the growing work pipeline.”

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