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Australian construction activity falls in Q1, decline in engineering construction to drag Q1 GDP growth
Australian construction activity dropped for the third straight quarter in the March quarter. On a quarter-on-quarter basis, the construction activity dropped 1.9 percent after an upwardly revised 2.1 percent fall in the fourth quarter. Housing and engineering construction continued to decline, falling 2.5 percent and 3.9 percent, respectively. Meanwhile, non-residential building bolstered, rising 3.6 percent. Public sector construction dropped by 3.7 percent, while private sector construction fell 1.3 percent.
Private sector construction was being weighed down by engineering construction and residential construction. Both new building and renovations dropped, falling 2.2 percent and 3.6 percent, respectively. Private non-residential building saw its most robust quarterly rise since 2012.
Public engineering construction dropped 2.2 percent quarter-on-quarter and 14.1 percent year-on-year, in spite of the considerable volume of public infrastructure work in the pipeline. Public non-residential building dropped 6.7 percent, reversing most of the gains from the previous quarter.
State wise, results came in mixed. Western Australia, Tasmania and Victoria recorded declines, while activity rose in South Australia, Queensland and New South Wales in the quarter.
“The sharper-than-expected contraction in residential activity during the quarter and the ongoing decline in engineering construction will undermine GDP growth in Q1 2019 and puts downside risk on our pick for the quarter”, said ANZ in a research report.
At 13:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at 5.17819 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 26.2617 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex