The ABS has just released data on the value of construction work done for the September quarter of 2013, which registered a seasonally-adjusted 2.7% rise in total construction activity over the September quarter and by 1.3% over the year. Analysts had expected a 0.5% increase over the quarter.
The increase in construction activity was driven by non-residential building and engineering construction, which rose by 3.7% and 3.5% respectively over the quarter, whereas as residential building construction was flat (see next chart).
Residential construction – the great hope as the mining investment boom unwinds – has been essentially flat for three quarters, which might worry the RBA (see next chart). For the time being, however, mining investment (represented by engineering construction) is holding-up better than expected, although the outlook appears grim.
The mining jurisdictions of Queensland (+10%), Western Australia (+4%) and the Northern Territory (+14%) drove the increase in construction activity, whereas New South Wales experienced a significant fall (-7%):
Overall, this release doesn’t tell us much that we don’t already know. The mining capex cliff is still to come, with housing poorly placed to fill the void.
