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).

5 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 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'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Thursday, 19 January 2017

WA gulps down its medicine

Resources construction 4 years beyond eak

It's now about 4.5 years since the resources construction boom peaked in 2012. 

The latest figures showed a further 4.7 per cent decline in activity over the third quarter of 2016 to $20 billion, well down from the 2012 peak of $34.2 billion. 

We're now getting pretty close to the end of the contraction, which is good news.

WA takes the pain

Although the resources capex contraction is sometimes still cited as evidence of a possible recession this year, in reality engineering construction activity is now rising (or at worst is flat) in most states and territories.

Arguably the Northern Territory will eventually see a further decline as its major LNG project transitions to production, but at the moment all of the declines are being accounted for by Western Australia, a state which is already in recession anyway.

With engineering construction in WA down from a quarterly peak of $12.2 billion in 2015 to $5.4 billion in Q3 2016, the state is finally taking its medicine.  

Queensland went through the same painful process in 2014 and 2015, but now activity is steadily rising again, driven by new roads, railways, bridges, harbours, telecoms, and other heavy industry infrastructure construction. 

Engineering construction activity was up for the quarter in Queensland, Victoria, South Australia, Tasmania, the Northern Territory, and the ACT.

As Western Australia still has a way to fall before extension of existing iron ore projects to replace depleted reserves stabilise the figures - and because there is also a bit of a drop to come in the Northern Territory post-Ichthys - my rough calculations suggest that resources cliff was about 85 per cent complete by the end of September 2016. 

And that figure may even be closer to 90 per cent by today.