The latest ABS figures reveal that the volume of construction work in the September 2019 quarter has declined in comparison with the previous quarter. The September quarter performance is, in fact, the weakest ever recorded in three years.

Master Builders Australia’s chief economist Shane Garrett observed that construction activity continued to sink lower with few signs of new infrastructure projects coming to life on the ground. The volume of construction work done during the September quarter slipped by 0.4 percent compared with the June 2019 quarter; activity is also down 7 percent compared with this time last year, Garrett said. 

The volume of work on the engineering/ civil construction side of the market has dropped by 9.6 percent over the past year. According to Garrett, this is the side of the construction industry where the portfolio of new infrastructure projects should be showing up.

“We should be in the early stage of an infrastructure construction boom but we are not there yet. We need state and territory governments to work with their federal counterparts to get construction activity moving on the ground,” he said. 

With the latest ABS data indicating that the risk of an economic growth vacuum was getting bigger, Garrett said that the focus must be on lifting short-term demand across the economy, which could be achieved by accelerating the rollout of government-led infrastructure projects. 

“Increasing government spending and accelerating the pace of project work would offer a very immediate way out of the current growth impasse,” Garrett added. 

Highlights of the ABS figures for September 2019 quarter:

  • Six of eight states and territories experienced falls in construction activity
  • Expansion occurred in Tasmania (+10.0 percent) followed by Victoria (+3.5 percent)
  • Largest reduction in construction work hit South Australia (-5.0 percent) followed by Western Australia (-3.8 percent ) and the Northern Territory (-3.1 percent)
  • Declines in construction activity were a bit more measured in Queensland (-2.1 percent), the ACT (-0.9 percent) and New South Wales (-0.5 percent)