UH-OH: Australian construction data comes in weaker than expected

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Oops.

The Australian Bureau of Statistics has just released the latest data for Australian construction work done for the third quarter and it’s a miss with a much weaker than expected print of -3.6% in seasonally adjusted terms.

It’s an acceleration of what has been a weakening trend over the course of 2014 and 2015 and a much weaker print than the 1.6% growth which was recorded in the second quarter. The data was also worse than the -2% the market had been expecting.

The break up of the data showed that total building work was up 0.6% to $24.156 billion. That growth rate was made up of a 2% increase in residential building to 15.523 billion while non-residential building fell 1.9% to $8.633 billion.

But this gain in building was more than offset by the 7.3% fall in engineering work which fell 7.3% in the quarter to $24.885 billion.

ABS construction work

This is slightly disappointing news and construction work done feeds into tomorrow’s release of the much more important private new capital expenditure tomorrow.

That will give traders, and the RBA, a guide to how big the hole the mining boom left is. Westpac said in its preview this morning they expect it expects “the 4th estimate to be an upward revision – but only at the margin – such that the survey remains downbeat for now.”

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