Australia’s construction activity seems to have declined slightly in Q3

Australia’s overall construction sector continues decline; however, the drag from engineering has past its peak. Construction activity in the second quarter declined sharply. It was driven entirely by private sector engineering work. For the September quarter, construction is expected to have declined just slightly. Private engineering, that is mining investment, is expected to have declined again, although by a much smaller margin, said Societe Generale in a research note.

The share of mining sector in the overall construction has dropped to 30 percent in the second quarter of 2016 from 48 percent in the third quarter of 2012.

On the contrary, building construction is expected to have continued to expand, looking by the recent building approvals data and the continued lengthening of work in the pipeline. However, the gain in the September quarter is expected to have been carried entirely by private sector construction of buildings.

Meanwhile, public sector engineering work has expanded robustly in the earlier four quarters by 19 percent, thus there is a slight risk of a pull-back here too. However, certain further gains are expected, carried not least by work at the state level, stated Societe Generale.

At 12:00 GMT, the FxWirePro's Hourly Strength Index of Australian dollar was bullish at 77.1604, while the FxWirePro's Hourly Strength Index of USD was neutral at -28.727. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex