MNI: Australia Q3 Construction Posts Record Rise On LNG Work

--Engineering Construction Posts Largest Rise on Record

     SYDNEY (MNI) - Construction Work Done data for the third quarter published

by the Australian Bureau of Statistics on Wednesday:

                               Private        Public                  Total

---------------------------------------------------------------------------

                          % Change Q/Q  % Change Q/Q           % Change Q/Q

Construction Work Done           +18.9          +3.3                  +15.7

MNI median                         N/A           N/A                   -2.0

                                                      (Range -7.1 to +24.0)

Building Work                     +0.1          -6.0                   -0.4

-Residential Building             -0.2           N/A                   -0.3

-Nonresidential Building          +1.0           N/A                   -0.6

Engineering                      +46.4          +6.1                  +33.0

     FACTORS: Construction work rose sharply in the third quarter, posting the

largest quarter-on-quarter increase in the history of the survey and beating the

previous record just a quarter earlier but the rise was due mainly to work done

on the new imported LNG platform. Because of this, private engineering work done

rose by the highest on record, up 46.4% q/q following a 32.5% rise in Q2. 

     Building construction disappointed with a 0.4% q/q decline after a small

0.2% rise in Q2. Private residential building constriction fell 0.3%, the third

straight quarter of decline. Within residential construction, private

alterations and additions fell 6.8% but this was partly offset by a 0.6% rise

new private residential building construction. Non-residential construction fell

0.6% as a 1.0% q/q rise in private non-residential work was more than offset by

fall in public work.

     TAKEAWAY: The outcome was much stronger than expected but within the range

predicted by economists. Economists at National Australia Bank and ANZ had

forecast a big jump due to the impact of the LNG platform. However, despite the

record rise in construction, the impact on Q3 GDP is expected to be minimal.

     The fall in residential construction is in line with the Reserve Bank of

Australia's view that the peak is dwelling construction may have been passed,

and is expected to be a small drag on Q3 GDP.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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