Construction recession deepens and spreads across all sectors

The slowdown in Australia's construction industries has intensified, with a far sharper than expected contraction over the second quarter. Key points: Construction work has fallen 11pc over the past twelve months and, in terms of value, it has retreated to levels reported at the start of 2017 Home building has fallen for four consecutive quarters to be down 10pc over the year The "ugly" result is expected to have a material impact on second quarter GDP, slicing around 0.4ppt off growth In seasonally adjusted terms, overall construction work fell by 3.8 per cent over the three months, well short of the more optimistic, but still weak, market forecast of a 1 per cent decline. Engineering construction, which takes in big infrastructure projects, failed to offset the housing slowdown and fell 1 per cent for the quarter to be down 16 per cent over the year. "With the construction sector representing around 13 per cent of the economy this result will dent second quarter GDP, potentially in the order of 0.4 percentage points," Mr Hanlan said. "Residential construction approvals fell 25 per cent in the six months to June and residential construction is is forecast to decline into 2021."