New figures on Wednesday showed what the construction sector contributed to economic growth in the June quarter.
Nothing.
Construction counts for about one seventh of all the activity included in gross domestic product (GDP).
And the volume of construction work contracted marginally in the quarter, by 0.2 per cent in real terms.
That means that the other six-sevenths of the economy generated whatever growth the Australian Bureau of Statistics (ABS) will report in the national accounts on Wednesday next week.
The flat result in the quarter was the combination of two things.
One was a surprisingly soft result in the engineering construction component, which has recently been dominated by big resource projects.
But the small 0.9 per cent rise in that category can be put down to its extreme choppiness from quarter to quarter.
In the previous three quarters engineering work done rose by 20 per cent, then fell by six per cent, then rose by 15 per cent, so not too much ought to be made of the latest, flat, result. Even after the June quarter pause, engineering work done was still up by 31 per cent from a year earlier and more than double its level a decade ago.
It’s a different story for both residential and non-residential building, the other factor underlying the overall June quarter outcome.
Housing construction, including additions and alterations, posted its fifth consecutive quarterly fall to be at its lowest level for exactly 10 years.
Non-residential building, which includes shops, offices, hotels and the like, made it three quarterly falls in a row and a three-year low for work done.
Total building construction, including both residential and non-residential, was lower in 2009 amid the fallout from the global financial crisis.
Aside from that brief dip, though, the June quarter level of building work was in line with the volume of activity being recorded back in late 2006.
For policymakers at the RBA, these figures will probably not change things.
It’s already well known that the building industry is not adding to growth, and most likely will not for a while.
It’s just as well known that engineering construction, while at a high level, can’t be relied on to add to growth in every single quarter owing to its volatility.
And it’s just as well known that the economy has some strong parts, notably mining, and some weaker ones, including both residential and non-residential building.
