Australia’s commercial construction hits new high

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Recent reports on the performance of Australia’s construction industry in Q1 2019 shows that it is experiencing highs in the commercial sector but lows in civil infrastructure.

“Official figures for Q1 2019 show that construction activity across Australia dropped by 1.9% compared with the end of 2018 – but there were signs of growth in some important areas,” said Shane Garrett, Master Builders Australia’s Chief Economist. “During Q1 2019, civil construction activity dropped by 3.9%, although commercial building saw 3.6% growth to reach a new all-time high.

“The re-election of the Morrison Government will boost confidence in our industry and is being welcomed by the hundreds of thousands of small firms active in building and construction.

“Unfortunately, the decline in civil construction activity during Q1 this year won’t be a surprise to the industry. The time taken for government infrastructure announcements to translate into real, visible activity on the ground is often far too long.

“We don’t want to see projects languishing on lists. We are hopeful that the Government’s renewed mandate will drive new energy in getting more projects shovel ready and construction work started.

“Turning to the commercial building space, it is encouraging to see the continuation of modest yet consistent growth. Population and employment increases continue to be robust in most parts of Australia. This creates the need for more offices, schools, hospitals and shops.

“Not surprisingly, residential building moved backwards by 2.3% during Q1 2019. Despite the fact that Australia’s population expanded by almost 400,000 over the past 12 months, fewer new homes are being built due to the negative impact of micro factors including the slow-motion credit environment post-Royal Commission.”