The ABS has just released data on the value of construction work done for the December quarter of 2013, which registered a seasonally-adjusted 1% fall in total construction activity over the December quarter but a 0.2% rise over the year. Analysts had expected a % increase over the quarter.
The falls in construction activity were across-the-board, with residential construction (-1.7%) and non-residential construction (-1.5%) fairing the worst and engineering construction (-0.5%) the best (see below chart).
Residential construction – the great hope as the mining investment boom unwinds – fell by 1.0% over the year, which would likely worry the RBA (see next chart). On the other hand, engineering construction (dominated by mining) has probably held-up better than expected.
All jurisdictions recorded falls in construction activity except Queensland, where activity was flat (see next chart). Queensland is also now leading the nation in construction thanks to the three large Gladstone LNG projects that are nearing completion.
Reading between the lines, this is a worrying release. Engineering construction is likely to fall precipitously over the next few years as large mining projects are completed. Yet, there are currently few signs that residential activity is picking-up, which will likely leave the economy in a hole as the once-in-a-century mining boom unwinds.
The dollar was hit half a cent, quite rightly
