The Australian Bureau of Statistics (ABS) has just released data on quarterly construction materials volumes, which showed continued weakness in the production of concrete blocks, clay bricks and roof tiles – materials typically used in housing construction – but ongoing strength in the consumption of cement and pre-mixed concrete – items more associated with infrastrure and mining investment.
The Data is not seasonally-adjusted and highly volatile. Hence it is presented below on a four quarter moving average (4QMA) basis in order to smooth volatility and seasonality:
According to the ABS, the production of concrete blocks and pre-mixed cement each increased by 4% over the year. By contrast, the production of clay bricks (0% change), concrete blocks (-4% change), plaster board (-5% change) and roof tiles (-10% change), were either flat or fell over the year.
The weak housing materials data is broadly supported by ABS data on dwelling commencements, which are running below average levels (particularly for detached houses), as well as new home sales, which are tracking at 16-year lows in annual terms (see below charts).
Based on recent data flow, the RBA’s plan for housing to fill the void left as the mining investment boom unwinds continues to look shaky.
