Sign in Subscribe
Real estate industry

Australian Construction Sector Sees Mixed Results in 2005 Year-End

Strategic Insights

— 1 min read

The Australian construction sector experienced mixed results at the end of 2005, with engineering construction continuing to boom while residential building activity slowed. According to the Australian Bureau of Statistics (ABS), building work done during the December quarter fell 3.8 percent to an adjusted $A13.271 billion ($US9.79 billion). The decline was weaker than expected, with the market looking for a 0.8 percent rise in the value of total building work done.

Key Takeaways:

  • The Australian Bureau of Statistics (ABS) reported a 3.8 percent decline in building work done during the December quarter, falling to an adjusted $A13.271 billion ($US9.79 billion).
  • Engineering construction remained strong, gaining 6.1 percent to $A9.314 billion ($US6.87 billion) in the quarter, offsetting the decline in building work.
  • Total construction work done, including engineering, rose an adjusted 0.1 percent in the December quarter to $A22.584 billion ($US16.67 billion).
  • AMP Capital chief economist Shane Oliver stated that the figures would likely cause economists to lower gross domestic product (GDP) estimates for the next round of economic growth data.
  • The Reserve Bank of Australia has indicated that the next move in interest rates will be up, but most economists do not expect a rise this year.
  • Master Builders Association of Australia chief economist Peter Jones predicts that total construction work done this year will be close to $A100 billion ($US73.8 billion), with residential building stabilizing and strong growth in commercial and industrial building continuing.
  • Housing Industry Association chief economist Harley Dale expects housing activity to moderate through 2006, with expenditure on housing continuing to fall.

Statistics:

  • Building work done during the December quarter: $A13.271 billion ($US9.79 billion) (decline of 3.8%)
  • Engineering construction: $A9.314 billion ($US6.87 billion) (increase of 6.1%)
  • Total construction work done, including engineering: $A22.584 billion ($US16.67 billion) (increase of 0.1%)
  • GDP growth estimates for the next round of economic growth data
  • Interest rate expectations: up, but most economists do not expect a rise this year
  • Predictions for total construction work done this year: approximately $A100 billion ($US73.8 billion)

Sources:

  • Australian Bureau of Statistics (ABS)
  • AMP Capital
  • Master Builders Association of Australia (MBAA)
  • Housing Industry Association (HIA)
  • ASIA PULSE 22-02 1737

Read more