A preview of the Q4 Construction Work Done data due from Australia at 0030 GMT along with Q4 Wage Price Index

Q4 Construction Work Done

  • expected -10.0% q/q, prior +15.7%

I posted previews here (via NAB) yesterday

More now, these via:


Currently, the Construction Work survey is an unreliable partial indicator due to the treatment of imported LNG platforms, (a few of which have arrived in recent quarters). The survey includes their full value when imported, rather than actual work in the period, as in the national accounts. 'Construction Work' reportedly rose 9.8% in Q2 and then by a further 15.7% in Q3, a $13.1bn increase in aggregate, largely due to a $12.2bn jump in private infrastructure.

  • By contrast, the National Accounts report only a $0.6bn increase in private infrastructure activity over the period.
  • Near-term, this spike in the Construction Work survey will be unwound.

Turning to private building and public works, activity in these areas grew by 1.2%qtr, 6.3%yr in Q3. For Q4, we anticipate a rise of around 1.4%, with strength broadly based across residential (led by renovations rebounding from a sharp dip in Q3); commercial building; and public works, particularly infrastructure projects.

TD Securities:

  • Dwelling +1.5%/q, following the 5-6% pickup in building approvals.
  • Engineering was distorted in both Q2 and Q3 as LNG plants 'land' as one lumpy asset (GDP smooths out the construction over several quarters). As these plants "drop out" expect a -35%/q correction (at least) to engineering investment, so the markets could be spooked by a bigger fall, but Q4 GDP won't be impacted.


Also due at 0030 GMT - Wage Price Index for Q4 2017: