According to the latest figures from the Australian Bureau of Statistics (ABS,) the overall value of construction activity in Australia declined in the fourth quarter of last year.
It does not appear the disturbing trend will reverse itself in the near future, either, as the total value of building work in the pipeline is at its lowest level since June, 2009.
On a seasonally adjusted basis, the overall value of building and engineering construction work done during the December quarter came in at $45.119 billion, according to the ABS’s Construction Work Done report – down 4.6 per cent when compared with the September quarter.
All sectors shared in the decline, with building activity down 4.0 per cent and engineering activity down 5.0 per cent.
Engineering however, remains strong on the whole. Compared with the December quarter last year, for example, the seasonally adjusted value of engineering construction work done in the current quarter was still up by more than one quarter (27.2 per cent), and on a ‘trend’ basis, which excludes not just seasonal fluctuations but other short-term or one-off movements, engineering construction activity in the past quarter was still more than three times its level eight years ago.
Furthermore, with the approval in January of the Ichthys LNG Project – one of the largest offshore LNG projects in the world, engineering construction activity is set to remain extremely strong in the first half of 2012.
Compared with one year ago, overall building activity is down 8.6 per cent, with residential building having fallen by 6.0 per cent and non-residential building down a shocking 12.2 per cent. Non-residential building was down 7.0 per cent in the December quarter alone.
In total, seasonally adjusted construction activity was up 9.2 per cent when compared with the same period twelve months ago.
Compared with the September quarter, the biggest fall in activity occurred in Western Australia (down 24.6 per cent), which was coming off an extremely strong rise in previous quarters. New South Wales (down 1.8 per cent) was the only other state to record a fall in activity.
On the positive side, Northern Territory (up 42.5 per cent) was the top performer, followed by Queensland (10.3 per cent), ACT (5.7 per cent), Tasmania (4.9 per cent), Victoria (3.6 per cent) and South Australia (0.7 per cent).
From a building perspective, just as worrying as the fall in activity is the shrinking pipeline of projects. At $50.293 billion the total value of building work in the pipeline as at December 31 was at its lowest level since June 2009.
Moreover, new data continues to point to falling volumes of new building work coming in. The latest figures from Housing Industry Association indicate that sales of new homes fell by a seasonally adjusted 7.8 per cent in January.