The Australian Bureau of Statistics (ABS) recently reported that the value of construction work completed over the three months to December 2015 fell to $48.4 billion, a 3.6 per cent decline compared with the previous quarter and a 4.3 per cent decrease on the previous year.
The total value of engineering construction work completed over the quarter was $23.4 billion, a 9.5 per cent drop compared with the September 2015 quarter and a 14.7 per cent fall on the December 2014 quarter.
Conversely, residential construction was up 2.8 per cent on the last quarter and 11.5 per cent on the previous year with a value of $16 billion.
Non-residential construction and building construction also reported increases. The former rose 2.5 per cent to $9 billion for the quarter, 2.2 per cent up on 2014, while the value of the latter lifted 2.7 per cent to $25 billion for the quarter, an eight per cent increase compared with the December 2014 quarter.
These results echoed trends observed in recent Australian Performance of Construction Index (PCI) reports, which suggested the engineering sub-sector was suffering due to the winding down of the resources boom. Peter Burn, head of policy at Australian Industry Group, one of the companies that publishes the PCI, also noted that residential building was likely benefiting from low mortgage interest rates, strong population growth and infrastructure developments.
Leading state
One state, however, appeared to buck the trend. A state government media release said Victoria’s engineering construction activity increased 11 per cent over 2015. It also stated that building work rose 12 per cent in 2015, “well above” the national average of eight per cent.
In addition, the media release stated that Victoria showed “the strongest growth in construction work done by any state in Australia” with an 11 per cent increase in total construction activity over 2015, as well as a 1.1 per cent lift over the December 2015 quarter.
Victorian Treasurer Tim Pallas said the state government had committed to $22 billion in infrastructure in the medium term to continue this trend.
More reading
Construction industry slows as residential market cools
Construction expected to grow from next year
Housing leads positive construction industry performance
Construction swings back to growth