Australia: Sharp fall in Q2 construction activity – Westpac

Andrew Hanlan, analyst at Westpac, notes that the Australian construction sector witnessed a sharper than expected fall by 3.8% in Q2 and over the past year, the level of activity declined by 11.1%.

Key Quotes

“That is the weakest annual result in 18 years - since the downturn in 2000/01 post the introduction of the GST.”

“The direct drag on GDP growth from the construction downturn is a sizeable 1.3ppts over the year - a sharp turnaround from a boost of 1.2ppts in the year to June 2018.”

“Weakness in the June quarter was broadly based, across housing, public works and private non-residential activity.”

“The fall in total construction in Q2 was sharper than anticipated (market median -1.0% and Westpac at -1.3%)”