Australia: Sharp fall in Q4 construction activity - Westpac

Andrew Hanlan, analyst at Westpac, points out that the Australian Q4 construction activity fell sharply by -3.1% due to downsides surprises in housing and public works.

Key Quotes

“Expectations were for a small rise (market median 0.5% and Westpac 0.4%).”

“With the construction sector accounting for 14% of the economy, the 3.1% drop in Q4 subtracts around 0.4ppts from overall activity. However, these partials do not always translate to the national accounts estimates 1-for-1 (particularly when the falls are relatively large).”

“The September quarter result for construction activity was downgraded, lowered to -3.6% from -2.8%.”

“The main surprises in the December quarter were around public and housing - with public construction activity falling, not rising; and with home building activity declining at a faster than anticipated pace.”