All the cranes on the Brisbane skyline, from the Valley and Newstead, to West End, Milton and Toowong, might suggest there is a building boom underway. Certainly activity is increasing in the building industry. Building construction work done in Queensland rebounded 4.0 per cent in the September quarter, after a 6.8 per cent fall in June quarter, and is now 2.7 per cent up through the year (see chart below based on ABS estimates released yesterday). This is not an extraordinary growth rate, however, and so we cannot say the sector is booming just yet. Furthermore, building construction activity is still below levels seen prior to the 2008 financial crisis and (temporarily) during 2010 when the sector was building a lot of new school halls funded by Rudd-Gillard’s Building the Education Revolution.
Additional perspective is provided by comparing building construction activity with engineering construction activity, which continues to fall from the extraordinary highs it experienced during the mining boom.
Regarding recent economic trends, there is an excellent new post from Pete Faulkner comparing ABS and Queensland Treasury economic growth estimates for Queensland:
So long story short. Mining construction activity slowing to long-term averages as we all should have expected, while other construction is also running at about long term average rates.
In other words, no need to panic, and no reason for the Government to prime the economy with uneconomic white elephant projects like stadiums or theatres that will create liabilities for Queenslanders for years to come.
Yes, well said Jim!