Australian construction work completed falls in Q3, engineering drags: While it is clear that there is some rebalancing taking place, residential construction is trending higher, it should be noted that engineering construction, despite the sharp decline witnessed in recent quarters, still makes up 56.1% of all construction spend. With the largest component sliding sharply it does beg the question whether the other components are likely to offset the continued slide expected in the year ahead? As they have noted many times this year the RBA lowered rates to spur construction activity in non-mining sectors of the economy. As it sits at present the pick-in those areas looks unlikely to stem the overall decline ahead. Would be great to hear the views from @SCallow, @jeliseo, @dbassanese, @ccaton, @cweston, @msomasundaram, @CKusher, @SKoukoulas and @peteal on this one. (VIEW LINK)
Good read DS. Resi construction may be trending higher in aggregate but new house building appears to have passed its cyclical peak which isn't so clever. Huge numbers of apartments underway, which is perhaps welcome from a construction spend perspective, but high-density apartment oversupply may introduce some systemic risk to housing markets too...
This from Mathan at Baillieu: When we started pushing the tidal wave of unemployment with economic outlook leading to interest rate cuts it sounded a bit number of months ago, now it is fast becoming consensus. Unemployment is going to get close 7% and remain close to 6% atleast till 2017. There is a lot of structural unemployment coming and we have not made any structural changes to cater for it. Mid-year budget outlook is going make Wayne Swan look like magician. Joe Hockey just went out of the line to be the next Liberal leader. 2016 federal election ruffy from a long way out....Julie Bishop to lead the Liberals as Tony steps aside for the good of the party. Victorian elections looks like a reverse of last Fed election....Labour wins purely to vote out Liberals.