Real-time thoughts & analysis of the markets, economy & more...
Co-founder & CEO of AllenWargent property buyers & WargentAdvisory (subscription market analysis for institutional clients).
Check us out here
TO COME AND SEE ME SPEAK LIVE IN SYDNEY - see www.quadrant2.net
Pete Wargent blogspot
Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).
4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.
"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.
"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.
"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.
"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.
"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.
Work done for the private sector was down by an utterly spectacular 37.4 per cent!
Fortunately, there have been some public sector works, with activity here up by +15.7 per cent over the 2016 financial year.
That's helped to cushion the blow just a little bit.
The monster crunch was almost entirely driven by the mega projects in Western Australia moving into their production phase - Gorgon, Roy Hill etc. - in part helping to explain why WA has been having such a tough time of it.
On the positive side there are probably now only one or two quarters of significant declines to come before activity is back at some kind of 'normal' level.
State versus state
At the state level we can see that activity is rising again in New South Wales and Victoria, and has been for about 18 months.
More interestlingly activity is now also up in Queensland, a resources state which took its medicine earlier than WA as its LNG and coal construction projects reached completion.
Although it doesn't matter so much at the national level, the Northern Territory still faces a precipitous decline as the Inpex/Ichthys spend winds up.
Elsewhere, in the southern states activity levels are fairly flat (I think probably in the ACT too, but the available data are incomplete).
Quarterly activity in WA of $6.5 billion evidently may have some way to fall yet, but overall the end of the mining cliff is now much nearer than the beginning.
The figures show that quarterly engineering construction activity peaked four years ago in September 2012.
It's impossible to get an accurate read on the work commenced, since there are holes in the data (and the figures that are captured are necessarily lumpy and prone to peaks and troughs).
However, the big picture is that work commenced has returned to some kind of normality.
In summary, the mining cliff is about 80 per cent or more baked in.