Build it bigger

Here’s some good news. Today’s ABS Construction Work Done report for the June quarter showed decent activity in regular building work – housing and commercial realty – and stratospheric activity in engineering construction, which is all those major projects in mining:

 

The boom is most obvious in the private sector but public sector is hammering along too, after a decade of neglect under the Howard government. When one considers that the NBN is just getting going, the promise of engineering construction becomes rather epic:

A state by state breakup shows that the latest surge is Queensland based, which is, no doubt, coal seam gas. WA and QLD are now enjoying similar levels of engineering construction. NSW is faring ok too, around coal:

Victoria may be missing out on the main game but is enjoying instead large fiscal transfers for special projects and powering head on the housing construction burst emanating from its people ponzi scheme:

Obviously, everywhere else is looking a bit tired vis-a-vis housing construction.

Houses and Holes
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Comments

  1. Not surprised by these numbers, I’m in the field and engineering is “so hot right now”. Hard, deep cuts during GFC, but less than 12 months later the recovery was complete. Coal is not even going to skip a beat post carbon tax, the project pipeline is ridiculous, all for export of course.

      • That’s kind of my point, we export it, someone else burns it, we reach our carbon emissions targets. Political problem solved.

        • Australia will only ever play lip service to climate change policy while we profit enormously from coal exports.

          The hypocrisy is breathtaking, especially from the likes of Gittins! who in one paragraph can both support action on climate change (domestically) and loudly cheer Australia’s coal export boom.

          God I hate that man.

          • No argument from me on that one, our political parties are hopelessly conflicted on all CO2 export industries. Too many blue collar jobs for Labor, too much corporate clout for the Libs. Hopeless.

            Ron Oxburgh is of the view that realistically, all the coal in the world is going to get burnt and we better start thinking about adaptation. Time to start living fast so I die young…

          • No argument from me on that one, our political parties are hopelessly conflicted on all CO2 export industries. Too many blue collar jobs for Labor, too much corporate clout for the Libs. Hopeless.

            Very true on both counts.

            Ron Oxburgh is of the view that realistically, all the coal in the world is going to get burnt

            Yep, sad but true. Humanity simply can’t deal with an issue this big, on timescales that stretch out to centuries.

            The answer for many is to retreat to denialism. Unfortunately I am not capable of such self-delusion. Seems to me its vanishingly unlikely the science is completely wrong.

            Time to think seriously about that doomstead in the hills…

          • That home in the hills is going to be beachfront property before too long, ie probably a good investment.

            Seems most people are hoping for some massive, negative climate feedback loop no-one foresaw, something like CDO’s but for CO2. Time to get the financial wizards onto CO2… um hang on…

          • how stupid of us to press our comparative advantage… this just in India is stopping all outsourcing, China is giving up on rare earth, the middle east are leaving all oil in the ground..

            heaven help anyone gets in the way of Lorax and his ‘vision’

          • heaven help anyone gets in the way of Lorax and his ‘vision’

            It must be nice to live in denial. Big problems don’t need to be dealt with. You just deny them away.

  2. Good news on MB rarely seems to attract as many comments as the doom and gloom posts.

    Still, while this is good news the benefits still seem to be somewhat narrowly distributed, based on the funk that a fair whack of the economy is experiencing.

    • There’s an element of truth in your comment – today’s great result for BHP and BHP advising that their major investment spend of some $4.3 billion will be in Western Australian iron ore.

      Good for WA, for the nation and employment across a range of fields. Excellent news.

      • The BHP result made me feel physically ill.

        $1000 in profit for every man, woman and child in the country, and they say they can’t afford the mining tax.

        Bollocks!

        • Global operations, international business.

          Have to say though, iron ore was a star performed and that is Ausrtalian based.

          And don’t worry, they will continue to pay corporate taxes plus into the future, the newly minted MRRT. All good.

          http://www.bhpbilliton.com/home/investors/reports/Documents/110824_BHP%20Billiton%20Preliminary%20Results%20for%20the%20full%20year%20ended%2030%20June%202011.pdf

          If you log on now you will catch Klopper’s discussion of profits and future direction (am watching it).

          • BTW Fanboy, a serious question, not a taunt (for once):

            I’ve seen mining boom cheerleaders often make the point that all Australians can enjoy the benefits of the boom by owning mining company shares (either directly or via their super fund). But when I look at BHP’s performance over the past 3-4 years its gone nowhere. Dividend yield is rubbish as well.

            So who benefits? Overseas investors in BHP definitely have via currency appreciation. Government has through increased tax receipts. BHP’s management and employees are certainly very well remunerated.

            But everyday Australians with connection to mining — how have that benefited given that the share price has done nothing?

          • Nonetheless, that still remains a reasonable number of beneficiaries you list!

            Overseas investors, government, and BHP employees. That’s it. That’s a reasonable number of beneficiaries of this fabulous mining boom that’s supposedly making us all wealthy?

            You’re nuttier than I thought.

          • Don’t forget every single Super fund holds BHP. So we’re all winning. Except for those of us who get better returns by doing it themselves.

          • Don’t forget every single Super fund holds BHP. So we’re all winning

            Wow juk. You completely and utterly missed the point. How about you read up thread before posting next time.

          • The biggest delivery so far for those with no connections to ming has been through PAYG tax cuts….. I went from 48 cents in the dollar to 33 overnight.

  3. Surely this is a lagging indicator? (I reckognise and accept that engineering construction is just heating up).

    However, there was a fair whack of public stimulus that is being withdrawn now (latest building approvals support this, and are more forward looking).

  4. decent activity in regular building work – housing and commercial realty

    Really? The numbers for 2011 look diabolical in NSW. Bad in Qld and Vic, and weak elsewhere. I see a tiny blip upwards in SA, but that’s it.

  5. engineering employs small number of people compared to residential/building construction. building construction is significantly down so there is no much good news here

  6. Overseas investors who are sending foreign investment to oz, BHP employees who are then spending their incomes inAustralia (and paying income tax), and the government who needs the mining boom to continue to provide social services such as public health, education and unemployment benefits….