The healthy growth implies a more robust outcome for economic growth, when data for the September quarter is released next week.

Total construction work completed in the period rose by a seasonally adjusted 2.8 per cent, the Australian Bureau of Statistics reported yesterday.

The work done was valued at a record $29.325 billion, up from $28.515 billion in the June quarter. The result was better than the median market forecast for a 1.7 per cent climb.

Westpac senior economist Andrew Hanlan said construction was making a significant contribution to economic growth and would add to the case for further interest rate rises.

“We’re seeing, at least in the September quarter, strength across the board, boosted by the mining boom and increased public works,” Mr Hanlan said.

ICAP senior economist Matthew Johnson said the figures point to stronger gross domestic product growth in the three months to September.

“Construction work done is not a keynote release. However, it’s a little larger than expected, and all other being things equal, it points to a larger than expected increase in third-quarter GDP,” he said. The September quarter national accounts figures will be released next Wednesday.

According to ABS, engineering work done jumped by 1.4 per cent $12.661 billion in the quarter.

The number of completed building projects climbed by 4 per cent to $16.664 billion, with residential construction up by 1.6 per cent and non-residential building rising by 7.6 per cent.

Public works experienced an 8.4 per cent increase while private projects were up by 1.5 per cent.

“Much of the growth in the September quarter in construction work can be attributed to public sector construction projects,” CommSec equities economist Martin Arnold said. “While public construction activity can be volatile, the (federal) government remains well placed to boost spending in this area.”

The incoming Labor government has pledged $22.3 billion for road and rail projects so far, with the likelihood of more infrastructure project funding to come.

But JP Morgan chief economist Stephen Walters said construction growth could be curtailed in coming quarters as tighter borrowing conditions discouraged builders from starting new projects.

“Most of these (September quarter) numbers referred to a period prior to the credit crunch, and things have tightened up since then,” he said. “I don’t think you’ll see growth at the same sort of rate.”

Source

This entry was posted on Thursday, November 29th, 2007 at 12:32 am and is filed under General News. Tags: Andrew Hanlan, Australia, Australian Bureau of Statistics, Bed, Condition, construction, ICAP, JP Morgan, Labor government, Martin Arnold, Matthew Johnson, media, mining, Public, Stephen Walters, Westpac. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.