Mining investment decline has driven recent economic weakness

New data from the ABS show that although residential and commercial building activity is picking up nicely, the pick up is in no way large enough to offset the decline in heavy/engineering construction, which has largely occurred in the resources sector (see charts below). The decline in engineering construction will have had both direct and indirect, flow-on impacts, affecting not only people employed in mining construction but engineers, environmental scientists, and others who rely on work associated with mining construction projects. I expect the drop in engineering construction will contribute to weak conditions in the Queensland economy over the remainder of the year at least. As I’ve discussed before, I’m more positive about the medium and long-term outlooks due to the coming commencement of LNG exports and expected demands for workers in health and aged care and other services industries.

Construction_June_14Buildind_June_14

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