Australia’s construction sector has not only hit the brakes, it has moved sharply into reverse according to the latest data from the Australian Bureau of Statistics.
Construction work done in the three months to the end of 2018 was expected to rebound following a surprise fall over the third quarter.
However, the decline accelerated.
Total construction in seasonally adjusted terms fell 3.1 per cent over the quarter, compared with expectations of a marginal rise.
The total value of construction work done last year was $51.6 billion, around 2 per cent lower than in 2017.
While the slowdown in the engineering sector has been on a long-running story as the construction of big resource and gas projects wrap up, the sudden fall in residential work has become alarming.
The value of residential work fell 3.6 per cent over the quarter, although it is still up 2.1 per cent over the year.
The major surprise was the weakness in NSW and Victoria, the two powerhouses in the construction sector. Both reported their first quarterly falls in the value of construction in four years.
The weakness, particularly in the residential sector, is supported by private industry surveys run by the likes of the Australian Industry Group and the Housing Industry Association, which have reported home building activity to be at its lowest ebb in six years.
The slowdown is also feeding into the labour market, with the most recent detailed ABS data showing jobs in construction fell 1.6 per cent in the three months to November last year.