Due to a boom in the housing construction sector, the nation’s economy has experienced a much welcomed boost. Apparently the total construction work done in the first 3 months of the year has surged which has had a noticeable positive impact on the economy and has taken over from the mining sector which is going through a cooling off period.
The total construction work done at the first quarter of the year was given a substantial boost by the housing construction sector. According to data construction work increased by 0.3 per cent in the quarter ending March this year after a slight fall of 1.1 per cent in the December quarter.
According to economist Tom Kennedy from JP Morgan the data shows signs that the economy is moving away from its reliance on mining investment, helped by the growth in the construction sector.
According to statistics residential construction work rose by 6.8 per cent and non-residential work declined by 1.5 per cent. Engineering work including mines, roads, bridges and similar also declined by 1.6 per cent in the quarter.
Kennedy went on to explain:
‘‘Engineering, which is typically resource-related and has been going very strong for the past decade, is a very large component of total construction, it makes up roughly two-thirds, so really if that moves violently one way or the other, it has quite a large bearing on what happens to total construction work done,’’ Mr Kennedy said.
‘‘It looks like that decline today has been a drag on the headline figure.
‘‘There are some encouraging signs that we are seeing a rotation away from resource-sector led investment and building work toward the residential component.
‘‘This is one of the first pieces of the GDP accounting that we get which suggests that at least on the building side, things are still fairly subdued and a little bit underwhelming.’’
Image : yourlocalguardian.co.uk
According to another senior economist David de Garis from National Australia Bank said the data showed that housing construction is set to take over from mining as the key driver for the Australian economy. Housing and apartment construction is picking up and this has offset in part the decline experienced in the mining sector. Some economists are even optimistic that this rise in residential construction could mean better gross domestic product figures than previously anticipated.
de Garis was quoted by the post on Smh.com.au as saying:
‘‘Dwelling investment will be strong but other investment will be soft and consumption will be okay but net exports will be the big contributor in the quarter,’’ he said.
With the increase in residential construction it is important that we maintain a steady pace of productivity in order to sustain economic growth. In order to ensure that productivity is maintained and we don’t have any disruptions to construction projects, we should not underestimate the importance of maintaining safety.
Maintaining a safe site begins by ensuring that everyone on site regardless of their position or trade has undergone the necessary safety training, in other words the White Card Course.