Construction sector suffers further falls in December quarter

author-avatar By on February 27,2019
Construction sector suffers further falls in December quarter

Photo by Clem Onojeghuo on Unsplash

Australia’s construction sector has continued to decline, with total construction falling over the three months to December 2018.

According to the Australian Bureau of Statistics’ Construction Work Done release for the December quarter, the seasonally adjusted value of construction done fell by 3.1%.

The total value of all constructions, which includes residential and non-residential buildings, is now equal to just under than $51.1 billion.

This follows a fall of 2.6% during the September quarter, where the total value of construction fell to $51.6 billion.

The value of residential work fell by 3.6% from $19.2 billion to $18.9 billion, while non-residential buildings (i.e places of work) actually rose by 1.9%.

Geordan Murray, Senior Economist at housing Industry Association (HIA), said the record housing sector growth in 2018 is now slowing.

The large amount of building work done is a product of having such a large number of homes under construction during the year,” Mr Murray said.

“The figures also confirm that the volume of activity began to retreat from the peak during the second half of the year. The total value of building work done on new homes declined by 3.7 per cent in the final quarter of the year.

“(The data) implies that the pipeline of new residential building work is thinning out and as the homes that are currently under construction reach completion there are likely to be fewer new projects to replace them.”

Mr Murray also predicted further declines throughout the year.

“The number of homes under construction will continue to decline throughout this phase of the cycle and the value of building work will decline accordingly,” he added.

“Today’s figures are significant as they provide a good indication that next week’s GDP figures will show that the slowdown in new home building has detracted from GDP growth for the second consecutive quarter.

“HIA forecasts further declines in home building over the next two years which will provide a headwind for economic growth.”


For feedback or queries, email david.lammey@savings.com.au

Latest Articles

author-avatar
David Lammey is an experienced executive within the digital and financial services landscape. Before joining Savings.com.au, he spent 5 years as a Group Executive at Canstar, one of Australia's leading financial research and comparison businesses. David is an avid financial consumer and he enjoys offering a perspective balanced from having worked in the industry and being a husband and father of two.

Collections:

Get free insights & tips monthly

By subscribing you agree to the Savings Privacy Policy

Loading data please wait...

{{returnData.productName}}

Overview

Current Rate

{{returnData.currentRate | percentage:2}}

Comparison Rate*

{{returnData.comparisonRate | percentage:2}}

Rate Type

{{returnData.rateType}}


Fees and Features

Ongoing Annualised Fee

{{returnData.annualFee}}

Upfront Fee

{{returnData.upfrontFee}}

Offset Account

Redraw

Principal & Interest

Interest Only

N/A{{returnData.interestOnly}}

Max loan to value ration (LVR)

{{returnData.maxLVR | percentage:0}}

Lump sum repayments

N/A

Additional repayments