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‘Ugly’ construction figures at GFC lows
The construction sector unexpectedly weakened in the June quarter to GFC levels, with economists holding fears about the knock-on effects of such a lull.
‘Ugly’ construction figures at GFC lows
The construction sector unexpectedly weakened in the June quarter to GFC levels, with economists holding fears about the knock-on effects of such a lull.
According to the Australian Bureau of Statistics, the total amount of construction work done in the June quarter fell by 2.7 per cent, with seasonally adjusted estimates for total construction work done falling by 3.8 per cent to $48.77 billion over the period.
Building work fell by 2.2 per cent for the June quarter in 2019, with residential building work hardest hit at 3 per cent, while non-residential building work dropped by just 0.8 per cent.
The adjusted estimates of total building work done fell by 5.7 per cent to $28.5 billion in the June quarter, according to the bureau’s statistics.
Engineering work done fell by 3.1 per cent in the June quarter, while the seasonally adjusted estimate for engineering work also fell by 1.1 per cent to $20.27 billion in the June quarter.
IFM Investors’ chief economist, Alex Joiner, was quick to consider the construction data as “ugly”.
They are “not a hallmark of a strong economy at all,” he said, noting that the June quarter’s GDP growth seems beset with downside risks at this stage.
Master Builders’ chief economist, Shane Garrett, also weighed in, stating that the industry needs government support to “give it a real lift”.
“Even though we are supposed to be on the cusp of an infrastructure boom, engineering construction activity has not been this weak since the GFC,” he said.
He called for all levels of government to work together to get infrastructure projects going.
“It’s a clear sign that governments are not moving fast enough to advance infrastructure commitments to the construction phase,” Mr Garrett continued.
He considered that “a visible expansion in the amount of construction projects taking place would lift morale in the industry and show everyone that our economy is on the up again”.
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