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Construction weakness moderates in third quarter

The total value of construction activity fell over the past quarter, albeit below market expectations.

The Australian Bureau of Statistics (ABS) has released its construction data for the three months ending 30 September, reporting that the value of construction work completed over the period fell 0.4 per cent in seasonally adjusted terms.

However, the overall decline was less pronounced than expected, with the market previously forecasting a 1 per cent decline.

The quarterly decline was driven by a 3.1 per cent fall in the value of residential construction and a 0.2 per cent decline in the value of engineering construction, offset by a 4 per cent increase in the value of non-residential construction activity.

New residential construction activity fell 3.5 per cent in the September quarter, while alterations and additions slipped by 0.1 per cent.


According to an analysis from ANZ Research, most states and territories recorded falls in quarterly activity, with the exception of Tasmania and Victoria, where the value of constriction work increased by 10 per cent and 3.5 per cent, respectively.

South Australia recorded the sharpest quarterly reduction in activity (5 per cent), while weakness in activity across Western Australia moderated, from a fall of 6.6 per cent in the June quarter to a decline of 3.8 per cent in the September quarter.

ANZ Research observed that while construction activity is down 7 per cent year-on-year, the slide in activity over the third quarter was the slowest decline since the downward trend commenced in the third quarter of 2018.  

As a result, the research house expects the construction sector to be “less of a drag” on GDP, with the third quarter GDP figures due for release next week (Wednesday, 4 December).

[Related: South-east the exception to housing affordability bounce]


Construction weakness moderates in third quarter

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