Construction work falls in December

Liza Kappelle
(Australian Associated Press)

 

Construction work done across Australia fell by three per cent in the December quarter, underlining a weak end to a shaky year for the sector as bushfires raged.

Westpac senior economist Andrew Hanlan said it was a sharper fall than expected after consensus for a one per cent drop.

“It was a weak end to what was a weak year for the construction sector,” he said on Wednesday.

Total building work on homes declined by 4.6 per cent on the previous three months on a seasonally adjusted basis as work on non-residential buildings decreased by 3.4 per cent, the Australian Bureau of Statistics said on Wednesday.

Mr Hanlan said the construction sector has been in a cyclical downturn since mid-2018, with falls in five of the past six quarters.

Disruptions from the bushfires may have added to the weakness in the quarter – although it is notable that sizeable falls were evident in all states, he said.

“As to implications for broader economic growth, with the construction sector representing around 13 per cent of the economy, the 3 per cent drop in work in the December quarter will have a material direct impact.”

BIS Oxford Economics said non-residential building construction activity surprised on the downside, likely due to patchy quarterly activity because there is a strong pipeline of office, hotel and hospital projects.

The ABS said bushfire rebuilding and recovery activity will have some impact on future construction activity estimates but is not present in the December estimates.

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