Strong mining activity continues to drive growth in the engineering construction sector, the latest data shows.
But conditions remain extremely weak in both housing and commercial building.
On a seasonally adjusted basis, the overall dollar value of construction work done throughout Australia during the March quarter rose by 5.5%, according to the preliminary version of the March quarter Construction Work Done report from the Australian Bureau of Statistics.
Compared with the same quarter last year, overall activity is up by 15.0%.
Driven primarily by strong mining activity, the engineering sector led the way as the dollar value of activity rose by 13.3% during the quarter to be up a whopping 35.6% year on year.
The slump in building activity, however, continues. In the March quarter, the overall dollar value of activity dropped by 5.0% to be 7.7% down when compared with the same period last year. Residential building fell 2.0% to be down 8.3% year on year whilst non-residential fell 9.2% to be down 6.8% compared with March 2011.
Despite the overall rise Australia-wide, activity fell throughout all states except for Western Australia, where the value of construction work done surged by 43.8%. Tasmania, which recorded a 6.4% fall in activity, was the worst hit, followed by Queensland (-4.6%), Victoria (-4.5%), the Northern Territory (-3.8%), New South Wales (-3.3%) and South Australia (-2.1%). Activity throughout the Australian Capital Territory remained unchanged.
Master Builders Australia Chief Economist Peter Jones says the latest figures, taken in conjunction with the collapse of recent building and engineering firms, show that the Australian commercial building industry is ‘on its knees’.
“Yet another decline in building work done provides a backdrop to recent collapses of long term construction companies that will only have negative consequences for the supply chain and the wider economy” Jones says.
“The commercial building industry is caught on the wrong side of the two speed economy and the aftermath of the global financial crisis”.
The latest figures come amid the collapse of builder St Hilliers Construction Pty Ltd as well as engineering firm Hastie Group. The latest figures also follows moves by the New South Wales government to cancel road contracts entered into with troubled civil construction firm Reed Constructions.