Residential Construction Rises as Mining Plumbs New Depths in Australia
The fall in Australian mining-related construction activity is being offset by strong gains in residential construction, suggest the latest figures from the Australian Bureau of Statistics.
The data reveals that residential construction rose 2.2 percent in the June quarter, a further increase on the 7.3 percent uptick seen in Q1 2014.
Commonwealth Bank of Australia economist Gareth Aird said the rise in residential construction followed the pickup in building approvals in the past year, and that New South Wales was leading the way with a 6.7 percent residential increase, followed by 4.3 percent in Western Australia.
The substantial increase in homes being built should also help to alleviate the rising property prices
"The lift in dwelling investment is having the duel benefit of absorbing job losses associated with the downturn in mining investment while adding to the stock of housing," Aird said. "The latter will help to slow the pace of house price appreciation."
Housing experts believe the residential sector’s strong performance in recent months is driven by construction of detached houses, following on from growth in the multi-unit sector.
Less positive were the statistics from the engineering sector, which fell alongside mining investment. Total construction work in Q2 fell 1.2 percent (seasonally adjusted) as a result of the 3.1 percent drop in engineering work done, including mines, roads and bridges.
Elsewhere, work in the commercial building sector rose 0.5pct in the quarter to June.