We would like to thank you for your patience in waiting for the Q2 2017 report!

The Market Movement report has been delayed due to substantial changes in construction research at CoreLogic. Unlike previous quarters, the Q2 2017 Market Movement report reveals more of a time series in Cordell construction data, as well as comprehensive economic analysis for each state and territory that helps to explain movements in local construction markets. Now that we have built the new report and back series, you will not have to wait nearly as long for the Q3 2017 report. 

As with previous quarters, we take a snapshot of the number and value of new projects in the pipeline, moving into construction, deferred for 6-8 months, or abandoned. A comprehensive data snapshot remains at the back of this report. This gives us an indicator of health in the industry in which ideally we would see an increase in construction, and a decrease in abandoned projects.  

Overall, construction in the June quarter largely reflects movements in the broader economy. In September 2016, Australia had seen its first reduction in GDP growth in 4 years at -0.4%. This uncertainty towards the end of the year, as well as weak consumer demand and higher costs of living, had a knock on effect for commencements. In the June 2017 quarter, Cordell captured approximately 2,500 projects moving into construction, which was 7% lower than the number of projects commencing in the previous quarter. There is also more participation in construction from state and territory governments, as private sector demand is still in recovery from the collapse of the iron ore price in 2014. 

However when looking at the pipeline, which appears to be more responsive to economic growth, there are signs of buoyancy in the Australian construction industry. There was a 9% increase in the number of project applications in June 2017 on the previous quarter. There were 6,386 project applications captured by Cordell in the June quarter. In the year to June 2017, the number of development applications captured by Cordell increased 15.3% on the previous year, suggesting increased confidence in construction. 

The most active segment of construction in the June 2017 quarter was civil engineering, with 1,020 projects entering construction at a value of $8.9 billion over the period. 

This also reflects government owned projects, particularly in transport infrastructure. In the private sector, renewable energy project applications and commencements have also led in the civil engineering space. 

In this report, the economic and construction outlooks provided for Australia, and each state and territory, provide further insight into the current construction landscape. Your feedback is greatly appreciated, so feel free to get in touch if there are any other data points or insights you require in future editions