Australia's total construction work fell sharply in Q2. Data released by the Australian Bureau of Statistics on Wednesday showed that the total value of construction work completed in Australia fell 3.7 percent in the second quarter from the first quarter to A$47.42 billion. It was the largest q/q fall since Q3 2015, and was 11 percent lower than a year ago.
Steep fall in mining-related engineering construction likely drove the fall in total construction. Private engineering construction fell by 14 percent in Q2, which was the largest fall since the early 1980s recession. Australia's economy is experiencing the maximum drag from the unwinding of the record boom in resource-sector investment.
Residential investment posted another solid gain, but the weakness in engineering likely offset the gains. Residential construction rose solidly in Q2, while non-residential building remained little changed. Home building was up a healthy 9.7 percent at A$17 billion during the quarter, benefiting from historically low mortgage rates and brisk population growth.
"Falling construction work would probably lop 0.5 percent off second quarter GDP, having already subtracted 0.1 percent from the first quarter," notes ANZ economist Daniel Gradwell in a report.
