Australia: Construction work declined by a relatively modest 0.7% in Q1 - Westpac

Andrew Hanlan, Research Analyst at Westpac, notes that the Australian construction work fell by a relatively modest 0.7% in the opening quarter of 2017, broadly meeting expectations (mkt median -0.5% and Westpac -0.2%).

Key Quotes

“Construction work is beginning to stabilise, after trending lower over recent years, weighed down by the mining investment downturn.”

“At the turn of the year, the mining investment downturn is waning and public works is providing a boost to activity.”

“Private infrastructure work actual rose 1.8% in the quarter, which is a surprise – with further falls still likely. We note that total construction work in Q1 fell in the mining states of WA and Qld.”

“Public works rose 3.0% in the quarter, with gains in both infrastructure and building.”

“Another factor at play in the March quarter 2017 was wet weather. A weather disruption is arguably apparent in home building, with activity weaker than suggested by approvals and the sizeable work pipeline.”