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Construction trends reveal rebalancing
Topic Started: 28 Aug 2014, 02:31 AM (1,181 Views)
Mike
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http://www.news.com.au/finance/business/construction-trends-reveal-rebalancing/story-e6frfkur-1227038926540


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CONSTRUCTION figures on Wednesday summed up the economy's "rebalancing" pretty well, with activity fading in the sector dominated by mining, and picking up elsewhere, especially in home building.

THE figures came in three parts.
The first showed residential building - adjusting for price changes and seasonality - growing well in the June quarter.
The 2.2 per cent rise meant the volume of home-building - including extensions and additions - was nearly 10 per cent above where it was a year earlier.
The second part was non-residential building - offices, shops, hotels, factories and the like.
Activity in this sector was barely changed in the quarter, rising of just 0.5 per cent, while annual growth was tepid at just under three per cent.
Taken together, building activity was up by 1.5 per cent for the quarter and nearly seven per cent for the year.
Residential building and the parts of non-residential building not tied to the resources sector are seen as crucial to economic growth as the resources investment boom fades.
So growth in these sectors is good news.
The bad news is the third part of construction, what's called engineering construction - including ports, roads, bridges, mines and pipelines.
There, activity fell by 3.1 per cent in the quarter to be down by nearly six per cent for the year.
That was enough to overwhelm the modest rise in building activity.
As a result the total volume of construction work, building and engineering combined, fell by 1.2 per cent in the quarter to be marginally lower than a year earlier.
It was the weakest quarter for construction work since the final quarter of 2011, two and a half years earlier.
Ordinarily, that might be seen as evidence the "rebalancing", or "transition" as some economists have begun to call it recently, is not going according to plan.
But it's probably not as bad as the construction figures might suggest.

That's because a given increase in activity in the parts of the construction sector that are growing - residential and non-residential building - will add more jobs than a same-sized fall in activity in the engineering construction sector.
It will in effect be the reverse of the disappointing job-creation that's come with the resource investment boom.
In the five years to mid-2012, when engineering construction peaked, total construction activity rose an average of by nine per cent per year.

Despite that phenomenally strong growth rate, employment in construction crawled ahead by less than one per cent annually.
At the time it was the slowest five years of jobs growth in the sector since the tail-end of the early 1990s recession.
Since then, even though construction activity has fallen by an average of more than one per cent a year, employment in construction has actually picked up by a strong 2.7 per cent annually.
And that's thanks to the new bias in construction toward building, and home-building in particular.


This is why the Resources Boom is constantly over played, even the RBA admits it did not have the impact it thought it would. It is also why we are seeing little change in WA's unemployment rate.
http://mike-globaleconomy.blogspot.com.au/
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goldbug
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Even dead cats bounce if they fall from a great enough height and construction activity across the Australian building sector has certainly fallen since 2008.

A green shoot that will soon wither mike, the fundamentals of the aussie economy and the world economy are all screwed now. This is 1932, just before the second big leg down into a depression. Get used to the idea. Get out of debt.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Jimbo
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Mike
28 Aug 2014, 02:31 AM
This is why the Resources Boom is constantly over played, even the RBA admits it did not have the impact it thought it would. It is also why we are seeing little change in WA's unemployment rate.
So WA is more expensive than Brisbane and Adelaide for what reason exactly?

Also, we are building houses for people who are already here. Less people are coming to WA (457's down 41%) and Victoria to WA is now net negative. To sustain a housing construction boom you need more people coming in.

Non mining construction is not offsetting other construction.

http://www.watoday.com.au/business/the-economy/value-of-construction-activity-contracts-in-quarter-20140827-108xoi.html

The current building surge will fall back according to the HIA.

https://au.news.yahoo.com/thewest/business/a/24796653/wa-surge-in-new-home-building/

"HIA predicts construction will soon fall back to regular demand levels, dropping 10 per cent next year and by 3.2 per cent in 2016."
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Mike
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Jimbo
28 Aug 2014, 07:38 AM
So WA is more expensive than Brisbane and Adelaide for what reason exactly?

Also, we are building houses for people who are already here. Less people are coming to WA (457's down 41%) and Victoria to WA is now net negative. To sustain a housing construction boom you need more people coming in.

Non mining construction is not offsetting other construction.

http://www.watoday.com.au/business/the-economy/value-of-construction-activity-contracts-in-quarter-20140827-108xoi.html

The current building surge will fall back according to the HIA.

https://au.news.yahoo.com/thewest/business/a/24796653/wa-surge-in-new-home-building/

"HIA predicts construction will soon fall back to regular demand levels, dropping 10 per cent next year and by 3.2 per cent in 2016."
To bad Capex data shows an increase investment and construction faster then the declines in mining. You opened that big trap a fee hours too soon and now have a lot of egg on face with that statement.

http://www.smh.com.au/business/the-economy/surprise-rise-in-australias-capex-20131128-2ybh4.html

http://mike-globaleconomy.blogspot.com.au/
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Jimbo
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Mike
28 Aug 2014, 03:57 PM
To bad Capex data shows an increase investment and construction faster then the declines in mining. You opened that big trap a fee hours too soon and now have a lot of egg on face with that statement.

Sorry Mike, but my first language is English and I don't really have a second.

If you could translate "To bad" and "trap a fee hours" for me I might be able to respond.

Cheers.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Perthite
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Mike
28 Aug 2014, 03:57 PM
To bad Capex data shows an increase investment and construction faster then the declines in mining. You opened that big trap a fee hours too soon and now have a lot of egg on face with that statement.

http://www.smh.com.au/business/the-economy/surprise-rise-in-australias-capex-20131128-2ybh4.html
Lmao.. comment saved for future laughs.

Capex has obviously reached and new tipping point... 5 mega projects got approved last night.

:lol
Edited by Perthite, 28 Aug 2014, 05:18 PM.
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Jimbo
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Perthite
28 Aug 2014, 05:17 PM
Lmao.. comment saved for future laughs.

Mike is a gift that just keeps on giving.

Even if you don't save it, he will give it to you again and again.



Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Perthite
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Jimbo
28 Aug 2014, 05:22 PM
Mike is a gift that just keeps on giving.

Even if you don't save it, he will give it to you again and again.


He knows that I do.

:D
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Jimbo
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Perthite
28 Aug 2014, 05:28 PM
He knows that I do.

:D
I don't have to bother saving his stuff. He trips himself up every time he plonks his ten thumbs on the keyboard.

Poor old Mike, there but for the grace of God (and by having more than two functioning brain cells) go I.



Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Mike
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Jimbo
28 Aug 2014, 05:03 PM
Sorry Mike, but my first language is English and I don't really have a second.

If you could translate "To bad" and "trap a fee hours" for me I might be able to respond.

Cheers.
Called using an Iphone.

Try answering the question, you should have been a politician you try to sliver, you make a good a snake.
Perthite
28 Aug 2014, 05:28 PM
He knows that I do.

:D
Care to explain why Capex is rising when we are supposed to be in the largest mining investment bust in our History according to you.

How did you get this so wrong? Is it possible the other 94% of the National Economy that is not related to mining might be growing.

What is you're view.
Edited by Mike, 28 Aug 2014, 06:02 PM.
http://mike-globaleconomy.blogspot.com.au/
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