In July last year, we blogged about some areas of the Australian construction sector that were picking up. Eight months on, how is the Australian sector looking?
As the New Zealand construction sector continues its post-GFC surge, our neighbours across the ditch are having quite a different experience. Overall, Australia’s building sector has shrunk over the past four consecutive months (as reported here by the Sydney Morning Herald) which follows longer term trends. In an attempt to spur on the construction sector and encourage new orders, the Australian Reserve Bank recently cut the cash rate to record lows. However, the sector is yet to experience the hoped-for flow-on effects.
February did see growth in the area of Australian apartment building, with the best reading since November 2014. However, the following areas of the Australian construction sector have seen decreased activity over the past six months:
- Detached housing
- Commercial building
- Mining engineering
- Engineering construction
- Resource industry projects
It is worth considering the impact that a weakening Australian construction sector may have on the New Zealand construction sector.
We can expect more New Zealanders to return home from the Australian construction sector looking for opportunities here. We can also expect to see Australian migrants and Australian construction companies seeking opportunities here.