Australia: Q2 construction falls – ANZ
Catherine Birch, senior economist at ANZ, notes that the construction activity in Australia fell 3.8% q/q in Q2 2019 to be down 11.1% y/y and was the fourth (and largest) quarterly contraction in a row.
Key Quotes
“The decline in residential construction worsened to -5.1% q/q, dragging the annual result down to -9.6%. Non-residential building saw an even larger fall of 6.6% q/q and engineering construction rounded off the trifecta, down 1.1% q/q.”
“After two quarters of disappointing results, public engineering construction eeked out a 0.9% gain in Q2. However, it remains 16.1% down from the peak a year ago despite the solid pipeline of infrastructure projects. Public non-residential building dropped a further 4.9% q/q, following the 2.9% fall in Q1.”
“New building (-5.3%) and alterations and additions (-3.3%) combined to drag down private residential activity to its lowest level since late 2015. Private engineering construction has not yet bottomed out, falling 2.5% q/q, while private non-residential building lost all of the gains from Q1 and then some, down 7.3% q/q.”
“The sharper-than-expected fall in construction activity during the quarter will undermine GDP growth in Q2 2019 and puts downside risk on our pick.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
