Construction fell further to the lowest level since 2011.
Construction fell further to the lowest level since 2011.

Fall in Construction Work May Dent Australia Economy

Fall in Construction Work May Dent Australia Economy

Construction work dropped in the three months to March, which could have an impact on economic growth. The value of construction work done fell 0.7% in the March quarter to $46.4 billion, a slightly sharper fall than expected, and was down 7.2% in the year to March.
The biggest drag was housing construction, down 4.7% in the quarter, as developers put the brakes on residential projects, likely due to concerns of oversupply, AAP reported.
“Overall, construction fell further to the lowest level since 2011,” UBS economist George Tharenou said. “While the fall was largely as expected, the sharp retracement of housing was a negative surprise.”
National Australia Bank Tapas Strickland said that could have an impact on March quarter economic growth. “The topping out of apartment construction is an important element of the outlook for growth and interest rates as it has been a key driver of employment growth in the economy to date,” he said.
“Along with soft partial data to date, there is a real risk that Q1 GDP could print a flat or even a small negative outcome.”
There was a stronger-than-expected rise of 2.2% in engineering construction in the March quarter, the first increase for seven quarters. Economists said this possibly indicates some large public works projects in the eastern states are starting to offset the completion of mining projects.
The federal budget’s boost to infrastructure spending and home-building will give a lift to a construction industry facing a worse-than-expected slump by 2020.
The Australian Construction Industry Forum, which early this month predicted the loss of 166,000 construction jobs over the next three years as the double whammy of falling housing and engineering construction pushes the value of total construction down 14% from last year to $193.7 billion, said the federal budget’s $75 billion boost to infrastructure spending and moves to boost investment in affordable housing could ease that scenario.
It’s not all new money–the announcements included projects that were already factored into ACIF’s latest forecasts, including the second Sydney airport at Badgerys Creek, roads and the inland rail line connecting Brisbane and Melbourne. And the timing of new projects is still unclear. But the spending was likely to give a much-needed boost to an industry facing the prospect of both engineering and residential construction drying up at the same time, said Adrian Harrington, the chairman of ACIF’s construction forecasting council.

Short URL : https://goo.gl/0PyMBm
  1. https://goo.gl/GOnUxc
  • https://goo.gl/0XD1CY
  • https://goo.gl/6uYBzO
  • https://goo.gl/5MyKcj
  • https://goo.gl/t8u6hc

You can also read ...

Bithumb Hacked, $32m in Cryptocurrency Stolen
Cryptocurrencies dropped after the second South Korean...
South Africa GDP Shrinks
South African gross domestic product shrank 2.2% in the first...
Saudi Arabia, which employs about two-thirds of its citizens, is chipping away at a budget deficit that ballooned to almost 16% of GDP after the oil shock of 2014, while FDI slumped more than 80% last year.
Show up, swipe in. The routine is familiar to office workers...
Washington in March imposed tariffs of 25% on steel and 10% on aluminum, in a move mainly aimed at curbing imports from China.
Russia said on Tuesday it would impose import duties on US...
Taxes in Italy Drive Economy Underground
Italy grew rapidly over the 20th century, and its black market...
European businesses say it has become harder to do  business in China over the past year.
European companies complain they still face a tough business...
Australian Telecom Co. to Axe 8,000 Jobs
Australia’s dominant telecommunications company Telstra...
South Korea to Grow 3 Percent
The Organization for Economic Cooperation and Development has...

Add new comment

Read our comment policy before posting your viewpoints