Mining cliff approaches nadir
Tomorrow I'll update my analysis of Engineering Construction Activity for the June quarter.
In the March 2016 quarter engineering construction had declined by another 14.9 per cent in trend terms over the year to $23.7 billion.
Four long years after construction activity peaked at $34 billion per quarter in June 2012 - driven by a range of resources mega projects - the figures will show that we're now getting somewhere quite close to the bottom.
In fact, depending upon where you live in the country, the bottom many already be in.
The figures will show that New South Wales bottomed out in September 2014, and after scraping along the bottom for a while activity has been rising steadily as infrastructure takes over from mining as the driver of growth.
New South Wales had a significant number of black coal mining projects under consideration or construction through the peak of the mining boom around the Hunter Valley, Newcastle, Wollongong, Mudgee, Lithgow, and elsewhere - including Bengalla, (Wesfarmers, Rio Tinto), Ravensworth North, Ulan West (both Xstrata), Mount Arthur (BHP Billiton), Narrabri Stage 2 (Whitehaven Coal), and a whole raft of others.
Victoria never had any such such great surge from resources projects, with activity remaining relatively speaking fairly steady throughout the entire period.
And indeed engineering construction activity in Victoria too has been rising steadily since Q3 2014.
In Queensland the retracement still has a bit of a way to run. Engineering activity is already down by two-thirds since September 2013 as Gladstone's massive multi-billion-dollar LNG projects transition to production.
The main declines still to come relate to Ichthys in the Northern Territory and projects in the Pilbara such as Roy Hill and Gorgon transition to their respective production phases, with the available data lagging somewhat.
The LNG boom was supposedly to create property hotspots in Karratha, Gladstone, Dalby, Chinchilla, and so on.
Instead, what it created in the Pilbara from a real estate perspective was a temporary insanity, an unsustainable explosion in rents, over-development, and finally an epic crash.
Louis Christopher of SQM Research posted the below chart for Karratha yesterday, showing house prices down by another 60 per cent over the last three years.
Source: SQM Research
Asking rents for houses in Karratha have fallen even further, down by 64 per cent over three years.
In Queensland, Gladstone has followed a similar - if less severe - trajectory.