Based on ABS data released this week, a surge in construction activity commenced over the September quarter with the total value of work completed increasing by 12.5%. Most of the rise was driven by engineering works (up 22.6%) while the building sector saw an increase of just 0.6% in value over the quarter. Looking deeper into the figures, residential construction hasn’t seen any of the improvement with the value of construction work down 1.1% over the quarter and 3.9% lower over the year. The stronger than expected construction figures highlight the two speed nature of the economy. The value of engineering work (mostly attributable to the resources sector) was up 22.6% over the quarter and 48.9% over the year while construction activity across the non-resources sector remains pretty much flat.
The RP Data-Rismark Home Value Index results for October 2011 will be released on Wednesday of next week. The results, which will reflect market conditions pre-rate drop, are likely to see a continuation in the weak trend that has been evident since the start of the year, however recent months have seen value declines leveling. In October, consumer confidence was still low, together with a high volume of stock available for sale, low auction clearance rates and interest rates at an above average level which suggests more of the same conditions. Given that October was the last month in which official interest rates were at 4.75% before the 25 basis point cut in November, the next few months of data will be interesting to analyse to see if volumes or values show any improvement.
Thank you to R P Data for this Article
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