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NSW, ACT construction hit by lockdowns

An overall modest decline in construction work completed across Australia in the September quarter disguised big declines in NSW and the ACT, which were locked down at the time.

The Australian Bureau of Statistics said construction eased 0.3 per cent in the quarter to $53.9 billion compared with three months earlier, when economists had predicted a three per cent drop.

Total building construction fell 0.9 per cent to $30.4 billion in the quarter. 

Residential construction was unchanged at $18.8 billion in the September quarter, while non-residential construction fell 2.2 per cent to $11.7 billion.

In contrast, engineering construction rose 0.4 per cent to $23.5 billion.

Still, construction work in NSW fell 8.1 per cent, while in the ACT it slumped 15.5 per cent as the coronavirus lockdowns left their mark. 

However, in Victoria, which was also in lockdown, construction rose 5.8 per cent.   

“Both NSW and the ACT experienced a construction shutdown, which was then followed by an extended period of workforce restrictions,” BIS Oxford Economics principal economist Nicholas Fearnley said.

“The construction shutdown in Victoria occurred at the end of September and carried over into early October, so the December quarter is likely to show most of the impact.”

The data feeds into the September quarter national accounts due on December 1.

Treasury secretary Steven Kennedy told senators last month he expected the economy contracted by about three per cent in the September quarter as a result of the Delta variant hitting NSW, Victoria and the ACT.

If correct, it would represent the second-largest contraction in growth in the history of the national accounts – the record being seven per cent in the June quarter of last year and during the nation’s first recession in nearly 30 years.

Some economists believe the September contraction could be closer to four per cent.

AAP

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