Posted on 27 Aug 2008
A FALL in the volume of construction work done will weigh on overall economic growth in the June quarter.
The volume of construction work, after adjustment for price changes and regular seasonality, fell by 2.6 per cent in the quarter, the Australian Bureau of Statistics (ABS) said.
Within the total, building work was up by 0.2 per cent.
Residential building activity rose by 0.2 per cent and non-residential building - offices, shops, hotels and so on - was up by 0.3 per cent.
More than offsetting those rises, engineering construction - which includes bridges, mines, pipelines and the like - fell by 6.0 per cent.
The fall followed a very steep rise of 10.6 per cent in the March quarter, but still dragged the total down in the June quarter.
The fall in total construction work in the quarter is equivalent to about 0.3 per cent of gross domestic product (GDP), so it will shave that margin from GDP growth to be revealed by the June quarter national accounts on Wednesday next week.
Despite the dip in the June quarter, the annual growth rate in construction was a solid 5.9 per cent but public sector activity biased that upwards.
Construction for the public sector grew by 17.1 per cent over the year to June, dominated by a 24.4 per cent rise in engineering work.
Construction work for the private sector was up by only 3.2 per cent over the past year to the June quarter, with engineering work increasing only 0.7 per cent trough that period despite the mining boom.
Overall, the figures are consistent with the consensus that the economy is weakening and that interest rates will start falling at after the monetary policy meeting of the Reserve Bank of Australia (RBA) next Tuesday .
