December quarter Australian construction activity data are due to be released by the ABS today at 11:30am (AEDT). Disruptions associated with the onset of the pandemic extended previously established cyclical weakness in the sector, though eased restrictions and stimulatory policy will boost housing construction over the period ahead.
As it stands | Construction Work DoneNational construction activity contracted 2.6% in the September quarter and declined by 4.2% through the year. Weighing on activity significantly was the impact of Victoria's shutdown that restricted the access and numbers of workers permitted on sites. Non-residential work drove the declines falling by 3.4% (-14.7% in Victoria), while engineering work contracted by 3.3% and residential work was 1% lower in Q3.
Private sector construction activity was weaker than the headline result, contracting 4.4% in the quarter (-6.9%Y/Y). In the residential segment, alteration work rebounded by 4.6% in the quarter in response to the Federal government's HomeBuilder scheme, though new home building was yet to turn higher on the policy (-2.0%). Non-residential work plunged by 6.4%, weighed by the shutdown in Victoria. Meanwhile, engineering work was also down sharply -7.2%, though this came after a strong increase over the first half of the year (9.9%). Public sector activity advanced by 3.2% in Q3 (4.9%Y/Y), with rises in building (4.6%) and engineering work (2.7%). A full review of Q3's report can be found here
Market expectations | Construction Work Done
Construction activity is anticipated to advance by 1.0% in the December quarter, between a range of estimates from -1.1% to 5.0%.
Construction activity is anticipated to advance by 1.0% in the December quarter, between a range of estimates from -1.1% to 5.0%.
What to watch | Construction Work Done
Key in today's report are the details in the housing segment, with activity moving sharply higher in response to a range of policy stimulus measures from low rates and Federal and State government incentives. Expect non-residential work to remain weak on pandemic-related uncertainty with firms reluctant to invest into these headwinds, though rising investment from the public sector in infrastructure projects should help to attenuate this impact on the economy.
Key in today's report are the details in the housing segment, with activity moving sharply higher in response to a range of policy stimulus measures from low rates and Federal and State government incentives. Expect non-residential work to remain weak on pandemic-related uncertainty with firms reluctant to invest into these headwinds, though rising investment from the public sector in infrastructure projects should help to attenuate this impact on the economy.
