The resources and infrastructure booms continue to boost economic activity, with no sign of an easing.
Figures out yesterday from the Australian Bureau of Statistics (ABS) showed that total construction work done in Australia rose 2.8 per cent in the September quarter in seasonally adjusted volume terms,.
The value of work done in the quarter was $29.325 billion, compared to the revised fall of 2.1% , to $28.515 billion, in the June quarter.
That downward revision is intriguing given the strength shown by domestic investment in the June quarter's national accounts.
The ABS also said building work done in the September quarter rose to $16.664 billion, seasonally adjusted, from an upwardly revised $16.027 billion in the June quarter, engineering work done rose to $12.661 billion from $12.489 billion but housing work down fell by almost 1% in the quarter. Non-residential building work done however rose strongly.
The result was stronger than the median market forecast for a rise of 1.7% in the quarter and means the private new capital spending figures to be issued later today will be a bit better than expected, and next week's third quarter national accounts will also be solid.
The National Accounts are out on Wednesday, two hours after we get the result of the last Reserve Bank board meeting for the year on Tuesday.
Over the year to September all construction work done rose 8.9%, with engineering up 14.9%, non-residential up 1.9%; Building up 4.7% and housing was up just 1.9%.
Those figures point strong to a continuation of the strong level of activity, apart from housing, thanks to the commodities boom driving growth in mining and infrastructure projects.
Infrastructure will get a kick along in the next year of so as spending plans by the states start rising on railways, desalination plants, roads, hospitals and other projects. Some $85 billion in state financed pans have been forecast from state budgets over the last two years.
JP Morgan chief economist Stephen Walters said mining and infrastructure projects, particularly in the commodities states of Western Australia and Queensland, were driving commercial construction projects.
"The boom is still going on. There's no evidence it is slowing down," he said.
"We think it (the commodities boom) has another year to 18 months to go."
Mr Walters said residential construction along the east coast of Australia had picked up a housing shortages persisted.
Interest rates rose in August, in the quarter and again earlier this month.
Figures from the Housing Industry Association yesterday confirm the sluggishness of the home building sector.
In a statement the HIA said its new home sales figures for October show a 0.8% fall in the sale of new homes and units among Australia's largest builders and developers.
"The key measure, private sector detached house sales, fell by 1.6% and was down by 2% over the three months to October," the Association said in the statement.
"Sales in the more volatile apartments component increased by 25.3% following an equivalent fall in September. Apartment sales were down by 10% over the three months to October.
HIA Chief Economist, Mr Harley Dale, said that no clear upward trend was apparent in new home sales over the year to date.
"2007 looks set to mark the fourth consecutive year of weakness for new home sales," Mr Dale said.
"This situation reinforces the importance of the new Government's commitment to a national housing policy and highlights the need to implement such policy as soon as practicable," Mr Dale said.
On a state by state basis Victoria enjoyed a very strong October with detached house sales jumping by 28 per cent. Sales rose modestly in Western Australia and New South Wales, up by 2.7 per cent and 2.1 per cent, respectively. Sales fell by 5.5 per cent in South Australia and were down by 8.7 per cent in Queensland.
HIA's New Home Sales Survey is compiled from a sample of the largest 100 residential builders in Australia and is the first leading indicator on new housing activity released for each month.
