CEO Update: Recent Construction Figures
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Recent Construction Figures
The national accounts for the June quarter released this week show that GDP fell 7.0 per cent. It’s the largest quarterly fall since GDP records began in 1959, and far more significant than the second largest GDP contraction of 2.0 percent in the June 1974 quarter.
The latest fall follows a decrease of 0.3 per cent in the March quarter 2020 and means Australia is officially in a recession.
The construction industry added over $30 billion to the Australian economy in the June 2020 quarter, down 8.2 per cent from the March 2020 quarter. The construction industry contracted 4.7 per cent in 2019-20 to $130 billion, its contribution as a share of total GDP dropped 0.3 per cent in 2019-20 from 7.2 per cent in 2018-19 to 6.9 per cent in 2019-20.
The contribution of civil construction to the Australian economy increased 1.9 per cent in the June 2020 quarter to $6.6 billion, but due to contractions in the other quarters for 2019-20 is down 4.6 per cent ($1.3 billion) over the financial year.
Construction services contribution to the economy dropped 12.9 per cent in the June quarter to $16.1 billion and building construction fell 5.5 per cent to $7.5 billion.
Housing sales were hit hard in the June quarter, reflected in an 18.5 per cent decrease in ownership transfer costs (stamp duty) and a 15.9 per cent fall in the contribution of rental, hiring and real estate services since the March 2020 quarter.
Private expenditure on housing construction fell 7.3 per cent in the June quarter, and 12.6 per cent over the financial year. The renovations market is down 6.0 per cent for the June 2020 quarter and 1.5 per cent in 2019-20.
Commercial construction contracted 2.3 per cent in the June quarter, but overall was up 3.7 per cent for the financial year.
Civil construction slumped 5.5 per cent in 2019-20, however, this reflects quarterly reductions in expenditure from a high in the December 2018 quarter, troughing in December 2019 before increase 1.5 per cent in the March 2020 quarter and 1.9 per cent in the June 2020 quarter.
The ACT’s final state demand declined 2.2 per cent.
These sobering figures reinforce the importance of the ACT’s jobs and economy recovery package. It is vitally important that this plan not only promises increased support for the construction industry, but that this support be delivered.
