Construction is winding down sharply: Pete Wargent

Construction is winding down sharply: Pete Wargent
Construction is winding down sharply: Pete Wargent

EXPERT OBSERVER 

Residential building work done fell another 2½ per cent back in the first quarter of the year, to be 3.2 per cent lower than a year earlier. 
 
Unsurprisingly this largely continued to be driven by apartments and medium-density dwelling activity in Sydney and Brisbane. 
 
There'll plenty more where this came from in Q2 as well. 


More disappointingly engineering construction is also now winding down sharply again, to be some 12.4 per cent lower than a year earlier. 
 
New South Wales and Queensland held up relatively well on public and infrastructure works.
 
But this was a poor result for Western Australia with the lowest level of activity since 2005. 


In the post-Ichthys Northern Territory engineering activity is imploding towards zero.
 
The wrap
 
An ugly result, as median market expectations were for total construction activity to be flat, but year-on-year the contraction has now blown out to 6 per cent and falling fast. 
 
Market analysts and the most highly respected RBA-watchers are weighing up the potential for four interest rate cuts, in addition to fiscal stimulus or unconventional policies. 
 
 
The skilled vacancies figures for April showed construction jobs and trades down by between 10 and 20 per cent from a year earlier, pushing the monthly result lower once again. 
 
The trend for skilled vacancies nationwide is now also 6 per cent lower than a year earlier, albeit coming back down from a very high peak in New South Wales and Victoria. 

PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger. 

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

Tags: 
Construction Residential Market Trends

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