ECONOMIC UPDATE SEPTEMBER 2019 - ONLINE VERSION - Supporting the South Australian Building & Construction Industry & Workforce - CITB
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ECONOMIC UPDATE SEPTEMBER 2019
ONLINE VERSION
Supporting the South Australian Building & Construction Industry & WorkforceCONTENTS Overview 1 Positive Indicators 1 Negative Indicators 1 Building and Construction Indicators 2 Summary of ABS Indicators - South Australia 2 Analysis of ABS Construction Work Done June Quarter 2019, Cat. No. 8755.0. Australia 2 Analysis of ABS Building Approvals August 2019, Cat. No. 8731.0 4 Major Projects 5 Other commentary on Building and Construction Indicators 6 Summary of Latest Forecasting Reports Available 9 Master Builders Association (August 2019) 9 Australian Construction Industry Forum (May 2019): Australian Construction Market Report 11 Employment and Unemployment Indicators 12 ABS Construction Sector Employment Quarterly Data, August 2019 - analysis by CITB 12 ABS Labour Force - August 2019, Cat. No. 6202.0 13 Vacancy Report - August 2019, Australian Government of Employment, Skills, Small and Family Business 13 Other commentary on employment and unemployment indicators 13 Population Estimates 15 ABS Population Estimates - March Quarter 2019, Cat. No. 3101.0 15 Commentary on General Economic Conditions (various analysis) 15 Published 29 October 2019 Contact: citb@citb.org.au | 1800 739 839 5 Greenhill Road, Wayville SA 5034 PO Box 1227, Unley SA 5061 Disclaimer This publication has been produced for general information only and is not intended to constitute advice. Readers relying on the content of the publication do so entirely at their own risk. No warranty (express or implied) is given as to the accuracy or completeness of information provided. The information may be true and correct at the date of publication but this may change after publication. The CITB is not responsible for providing updates on such information. All projections and forecasts are based on assumptions. These assumptions may not hold true and therefore such projections and forecasts cannot be relied upon. The CITB is not responsible for providing updates on such projections and forecasts cannot be relied upon. The CITB is not responsible for providing updates on such projections and forecasts. All statements of opinion by the CITB represent the subjective views of the CITB and the CITB gives no warranty that such statements are correct. The publication may include statements of opinion by third parties which do not necessarily reflect the opinion of the CITB. All links to third party websites and references to third parties are included for convenience only and do not constitute endorsement of the material on those sites, or endorsement of the relevant third parties and their product or service. Readers should make their own assessment of all information provided (including statements of opinion and projections and forecasts) and consider obtaining independent professional advice before making any decisions based on such information. In no event is the CITB (or its trustees, officers, employees or any related body corporate) liable for any liability, loss, risk or damage (including incidental or consequential damages) incurred or suffered (directly or indirectly) out of the use of any information contained in this publication, whether based on contract, tort or other legal action. Copyright in the publication belongs or is licensed to the CITB and no part of this publication may be used, reproduced or copied without the CITB’s consent. Please refer all queries in respect of this publication to Eric Parnis, CITB Manager Research, (08) 8172 9509, ericp@citb.org.au
Overview
• There have been declines in all categories for construction work undertaken nationally
and in South Australia.
• Nationally, the housing contraction is quite severe, however not as significantly in South
Australia.
• Capacity constraints are a risk to the investment pipeline, especially in the Eastern
States.
Positive Indicators
• South Australia’s population growth rate is increasing.
• Employment in South Australia’s construction sector is at its highest level on record
• The decline in building approvals in South Australia over the past year has not been as
severe as in other states.
• Although construction activity has eased over the past year, activity levels remain at a
high level by recent standards.
Negative Indicators
• South Australia’s unemployment rate is the highest of all states and territories.
• Construction work done across all sectors (housing, commercial and civil) continues to
fall).
• Business confidence is declining.
CITB Economic Update September 2019 | 1BUILDING AND CONSTRUCTION INDICATORS
Summary of ABS Indicators - South Australia
Monthly data (trend) Latest Month Compared to a year
earlier
Dwelling approvals (August 2019 893 -11.4%
• Private houses 619 -3.3%
• Private ‘other’ dwellings
1
244 -33.0%
Non-residential building approvals $195.9m -0.0%
Quarterly data Latest Quarter Compared to a year
earlier
Dwelling commencements (Mar
2,447 34.2%
qtr 2019, seas. adj.)
Construction work done (June qtr
$2.9b -11.3%
2019, chain volume seas. adj.)
• Residential $0.8b -12.3%
• Non-Residential $0.6b -5.1%
• Engineering $1.5b -13.1%
Construction work in the pipeline
$7.4b -24.3%
(Mar qtr 2019, original)
• Residential $2.7b -8.0%
• Non-Residential $2.4b -23.4%
• Engineering $2.3b -37.7%
Source: ABS Building and Construction data.
Analysis of ABS Construction Work Done -
June Quarter 2019, Cat. No. 8755.0. Australia
Taken from ANZ Research – 28 August 2019:
• Australian construction activity fell 3.8%
quarter on quarter in the June quarter
2019. This was the fourth (and largest)
quarterly contraction in a row with de-
clines across all three categories.
Source: ABS, ANZ Research.
1
Other’ dwellings includes semi-detached, town houses, units, and multi-storey apartments.
2 | CITB Economic Update September 2019South Australia
Construction Work Done in the Quarter Chart and table prepared by CITB
Construction Work Done
South in the Quarter($billion, seas. adj.)
Australia
South Australia ($billion, seas. adj.) • Declines are evident in all categories.
4.0
3.5
3.0
Total
2.5
2.0
Engineering
1.5
1.0
Residential
0.5
Non-Residential
0.0
Jun-14
Jun-09
Jun-10
Jun-11
Jun-12
Jun-13
Jun-15
Jun-16
Jun-17
Jun-18
Jun-19
Source: ABS
Quarterly data Latest Compared Compared
South Australia Quarter to previous to a year
quarter earlier
Construction work done (Jun qtr
$2.9b -4.8% -11.3%
2019, chain vol. seas. adj.)
Residential $0.8b -4.8% -12.3%
Non-Residential $0.6b 1.0% -5.1%
Source: ABS
Analysis by South Australian Centre for Economic Studies – Analysis of
Construction Work Done data 4/9/19
• South Australian construction activity moderated in the June quarter
2019, continuing a general pattern of slow decline since activity peaked
in the second quarter last year. Data released by the ABS show that total
construction work done in real seasonally adjusted terms fell by 4.8 per cent
in the June quarter and was 11 per cent lower than a year earlier. A similar
pattern is evident at the national level, with construction activity down 3.8
per cent in the June quarter and down 11 per cent through the year.
• The fall in construction activity over the past year has been broadly based,
led by large falls in engineering construction (down 13 per cent) and
residential building (down 12 per cent), accompanied by a modest decline in
non-residential building (down 5.1 per cent).
• Although construction activity has eased over the past year, activity levels
remain at a high level by recent standards. The volume of work done in the
June quarter 2019 was 10 per cent above the previous 5-year average level.
CITB Economic Update September 2019 | 3BUILDING APPROVALS August 2019
SUMMARY Total Number of Dwelling Approvals Per Month
Monthly data (trend) Latest Compared
CHART 1: TOTAL NUMBER OF DWELLING
South Australia During August 2019, the number
Month
of newto a year
dwellings APPROVALS PER MONTH
earlier 2,400 24,000
approved:
AUSTRALIA (RHS)
Dwelling approvals
• (August
fell by2019) 893 in trend
0.9% in South Australia -11.4%
terms
(nationally, new dwelling approvals fell 3.9%);
Private houses 619 -3.3% 2,000 20,000
and
Private ‘other’ dwellings2
244 in seasonally
• fell by 30% in South Australia -33.0%
adjusted terms (nationally, new dwelling
Non-residential building approvals $195.9m 0.0% 1,600 16,000
approvals fell 1.1%).
Source: ABS SOUTH AUSTRALIA (LHS)
FURTHER ANALYSIS 1,200 12,000
Analysis of ABS Building
TREND DATA Approvals - August 2019,
Cat. No. 8731.0
The total number of dwelling approvals in South 800 8,000
Australia in August 2019 was 11% lower than a year
Analysis by CITB and reproduced from the Department of Treasury and TREND
Finance Economic ago. Nationally,
Briefing series. the number of dwelling approvals SEASONALLY ADJUSTED
was 26% lower than a year ago – see Chart 1 and
• The total number
The of dwelling approvals in South Australia in August
value
400 4,000
Table 1. of renovation approvals in South Australia
2019 was 11% lower than a year ago. Nationally, the number of
During August, the value of non-residential building
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
fell bywas
dwelling approvals
1.1% during August
26%oflower
but was
thansector
a yearhouses
ago.
11% lower than a approvals fell by 0.8% in South Australia, but was
The number private approved for
year ago. Nationally, the value of renovation unchanged through the year — see Chart 4.
• The number ofconstruction
private sector in houses
South Australia
approved fell
for by 1.6% during
construction in Source: ABS Cat. No. value
8731.0 of non-residential building
approvals fell 0.8% in August to be 2.2% higher than Nationally, the
South Australia fell byto
August 1.6%
be during
3.3% August to be a3.3%
lower than yearlower
agothan a
— see
year ago. a year earlier — see Chart 3. approvals rose by 5.7% during August, to be 36%
Chart 2.
higher than a year
CHART ago. AUSTRALIAN PRIVATE
2: SOUTH
• Private ‘other’ dwelling approvals in South Australia remained
Private ‘other’ dwelling approvals in South Australia SECTOR—NUMBER OF DWELLINGS APPROVED
unchanged during August but were 33% lower than a year earlier. South Australian Non-Residential
PER MONTH Buildings
remained unchanged
CHART during
3: APPROVALS August
FOR but were
ALTERATIONS & 33% CHART 4: SOUTH AUSTRALIAN NON-
1,600 Approved - $M. Per Month
RESIDENTIAL
TREND BUILDINGS APPROVED -
lower than a year earlier.
ADDITIONS—$M. PER MONTH
90 900 $M. PER MONTH
SEASONALLY ADJUSTED
400
Nationally, the number of private sector houses
AUSTRALIA (RHS) 1,400
Trend Dwelling
approvedApprovals by State
for construction fell by 1.0% during TOTAL
August, while the number of private ‘other’ dwelling
approvalsAug
fell by
19 9.2%.
vs Aug 19 vs 1,200
Aug 19 300
Jul 10 Aug 18
(no.)60 600
Table(% change)Dwelling
1: Trend (% change)
Approvals By State
1,000
NSW 3,687 -5.4 -30.0
Aug 19 vs. Aug 19 vs. 200
Aug 19
VIC 4,153 -4.0 -22.8
Jul 19 Aug 18 800
(no.)
QLD 2,415 -2.3 (% change) (% change)
-25.2
30 300
NSW 3,687 -5.4 -30.0
SA 893 -0.9 -11.4 600
VIC 4,153 SOUTH -4.0 -22.8
AUSTRALIA (LHS) 100
HOUSES
WA 1,252
QLD -0.2 2,415 -9.2
-2.3 -25.2
TAS 237SA 893
-0.4 TREND -0.9
-8.8 -11.4
400 TREND
WA 1,252 -0.2 -9.2
Aug-14Aug-14
Aug-15Aug-15
Aug-16Aug-16
Aug-17Aug-17
Aug-18Aug-18
Aug-19Aug-19
SEASONALLY ADJUSTED SEASONALLY ADJUSTED
AUS* 12,864
TAS -3.9 237 -25.6
-0.4 -8.8 0
0 0
AUS
Source: ABS Cat. No. 8731.0 12,864 -3.9 -25.6
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Source: ABS Cat. No. 8731.0
Commercial and Economics Branch Note: The ABS excludes large irregular movements in a
1 October 2019 seasonally adjusted series when calculating a trend
Public – I2 – A1 1 series. This is pertinent in this brief where seasonally
adjusted private sector ‘other dwellings’ has recorded
large irregular movements in South Australia, and
explains why there is a large difference in the movement
2
Other’ dwellings includes semi-detached, town houses, units, and multi-storey apartments.
of these series.
4 | CITB Economic Update September 2019
Next release of ABS cat. no. 8731.0 is 31 October 201910
Projects under construction,
committed or completed
AUDbn
8
6
4
2
0
-23 23-24 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24
Possible Under construction Committed Under consideration Possible
South Australia Major Projects Major Projects
Figure 28. SA major projects
5
Potential investment
ANZ Research – Australian Major Projects September
pipeline 2019 publication (national and state data)
4 • ANZ expects a lull in South Australian roads
activity as sections of the North-South Corridor
Projects under construction,
committed or completed are completed but this should ramp up again from
3
2022-23 when the final two sections – touted as
AUDbn
the state’s biggest ever infrastructure project – get
underway.
2
• Renewable energy is a key focus, with an estimated
$7 billion worth of projects under construction,
1 committed or under consideration in South
Australia. The state government plans to achieve
net 100% renewable energy by 2030. A new $1.8
0
-23 23-24 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24 billion Women’s and Children’s Hospital is also on
ossible Under construction Committed Under consideration Possible the cards.
Governments,Source: ANZAccess
Deloitte ResearchEconomics, company reports, ANZ Research
Major Projects List South Australia
19
Roads Electrical
Project Value Completion Project Value Completion
North-South Corridor: Ceres Wind Project 1.6bn 2020-21
Northern Connector and 1.5bn 2019-20
Darlington Interchange Source: ANZ Research
North-South Corridor:
5.1bn 2022-23 Hospital
final two sections
Source: ANZ Research
Project Value Completion
Royal Adelaide Hospital:
New Women and 1.8bn 2020-21
Children’s Hospital
Source: ANZ Research
Publc Infrastructure
Cost
Company Project Industry Start End
(AUDbn)
SA Department of Planning, Transport and North-South Corridor: River
2.6 Road 2022-23 2027-28
Infrastructure Torrens to Anzac Highway
SA Department of Planning, Transport and North-South Corridor: River
2.4 Road 2022-23 2027-28
Infrastructure Torrens to Darlington
New Women’s and Children’s
SA Department for Health and Wellbeing 1.8 Hospital 2020-21 2025-26
Hospital
Source: ANZ Research
CITB Economic Update September 2019 | 5battery storage, is currently under construction.
Much of the activity within the forecast horizon is concentrated in New South Wales –
underpinned by the Snowy Hydro – but South Australia and Queensland also have particularly
strong pipelines. Renewables projects inject economic activity into mainly regional and remote
areas, unlike the capital city transport projects that make up the bulk of our Major Projects.
Possible mega-projects suggest the renewables sector could continue to grow substantially in
the mid-2020s. One such project is the proposed $20bn, 10GW solar farm and 20-30GW
storage facility that would be constructed near Tennant Creek in the Northern Territory.
Another is the Asian Renewable Energy Hub, proposed by a consortium for Western Australia’s
Pilbara Region. The hybrid wind and solar project would generate up to 15GW of renewable
energy. The capital spend is expected to be $22bn, invested over a six- to seven-year period
from the mid-2020s.
As well as supplying the local market, these two projects would generate exports via sub-sea
electrical cables. Although these two projects are substantial, at this stage, only the first year
of construction on the Tennant Creek facility is included in our forecast horizon. The two
projects represent significant upside to the renewable project pipeline.
Renewables investment, by state Renewable Energy Projects
Figure 20. Renewables investment, by state
10
• Much of the activity within the forecast horizon is concen-
trated in New South Wales – underpinned by the Snowy
Hydro – but South Australia and Queensland also have
8
particularly strong pipelines. Renewables projects inject
economic activity into mainly regional and remote areas,
unlike the capital city transport projects that make up the
6
bulk of our Major Projects.
AUDbn
4
2
0
14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24
NSW VIC QLD SA WA TAS NT ACT
Source: ANZ Research
Source: Clean Energy Council, Deloitte Access Economics, company reports, ANZ Research
Other Commentary on Building and • For construction trades in 2018, only 44% of vacancies were
filled and on average there was only one suitable applicant
Construction Indicators per vacancy, which is worse than at any time during the
mining boom or residential construction boom.
ANZ Research – Australian Major Projects September 2019
publication (national and state data) • This tightness is not being reflected in the wage data.
Construction industry wage growth (excluding bonuses) was
• Capacity constraints are a material risk to the investment just 1.9% year on year in quarter 2 2019, one of the slowest
Australian Major Projectspipeline.
| September 2019 17
rates among the industries.
• The high levels of infrastructure investment over the past • With the unemployment rate at a relatively low 5.2%, reduced
few years have coincided with reports of rising costs and availability of labour is not confined to the construction
difficulty in sourcing labour and input materials. sector.
• Much of the evidence so far is anecdotal and it is difficult • We have actually seen construction employment trend
to find conclusive evidence of capacity constraints in the downwards nationally as residential activity contracts, but
macro-level data for several reasons: skills are not always transferrable between residential and
• The contraction in residential construction since infrastructure construction, particularly at higher skill levels.
late-2018 has offset some of the impact of higher As such, the level of vacancies remains relatively high.
infrastructure activity. • Reports of capacity constraints appear to be on the rise.
• The tightness in the labour market, despite the slowdown In early September 2019, the Victorian Premier, Daniel
in economic growth, reduces the availability of suitable Andrews, and the Prime Minister, Scott Morrison, jointly
labour in general. announced a $370 million cost blowout in Stage 2 of the
Monash Freeway upgrade prior to major construction works
• Downturns in construction capacity utilisation and commencing, with no changes to the scope or design. They
profitability have largely coincided with deteriorations in cited labour shortages and material costs as the reasons.
the same measures for the wider business sector.
• In a 2019 survey, Allens, an international commercial law firm,
• Reports of constraints have mainly come from Melbourne found that 43% of infrastructure leaders in Australia believed
and Sydney, where the biggest projects are located. the industry’s biggest concern was the inability to deliver
• Tight labour markets are contributing to difficulty in the current project pipeline. They also considered tunnels
sourcing skilled labour. Data from the Department of and rail to be the highest risk projects. The survey identified
Employment, Skills, Small and Family Business’ Survey of the large volume of projects in Sydney and Melbourne as a
Employers who have Recently Advertised supports claims of contributing factor.
growing difficulty sourcing skilled construction labour. • There are several tunnelling projects underway or in planning
• In 2017-18, engineering occupations saw the poorest results at the same time. These require different equipment and
in six years, with 59% of vacancies filled and an average of skills from above-ground projects.
2.3 suitable applicants per vacancy. • In June 2019, The Age reported that Melbourne Metro’s
cost may have blown out by a further $2 billion, in part due to
geological issues.
6 | CITB Economic Update September 2019• S&P has raised concerns about Australia’s ability to “Australia’s Biggest Home Builders Shrink”
deliver projects without delays or cost escalations. S&P Taken from Sourceable
also highlighted the risk of a domino effect if firms and
subcontractors booked up with multiple projects face
delays on even one project. Increased risks of delays and Note: This is national data based on a recent HIA Report
cost escalations pose a threat to profit margins which may • Australia’s biggest home builders have seen significant
discourage firms from bidding on projects. declines in revenues and new home starts as the slowdown
• In a recent example, Acciona won $576 million in in new residential construction continues to bite, the latest
compensation from the New South Wales Government over research has found.
the CBD and South East Light Rail project, claiming that it • In its Housing 100 report prepared in conjunction with
was misled over its complexity. Colourbond Steel, the Housing Industry Association said the
• Local content requirements in Victoria also have supply and number of dwellings on which the nation’s 100 largest home
cost implications. For example, on the West Gate Tunnel, building companies broke ground dropped from 74,565 in
92% of the estimated 110,000 tonnes of steel must be 2017/18 to 67,694 in 2018/19.
sourced from within Australia. • Amongst the top ten home builders, six broke ground on
• Ultimately, without effective policy action, capacity fewer homes and apartments last financial year compared
constraints pose a material risk to both public and private with the previous financial year.
delivery of necessary infrastructure. • The slowdown in top 100 starts reflects a broader slowdown
“Adelaide Brighton reports net loss, expects construction in the market for new home and apartment construction.
recovery in 2021” – InDaily 29 August 2019 report • The top 100 home builders actually grabbed a larger slice of
• CEO Nick Miller said in a statement to the ASX that the the pie, taking their share of overall housing starts from 33
company is expecting residential construction to continue percent in 2017/18 to 35 percent in 2018/19.
to decline in Australia until 2021, but demand for mining and • This means that smaller builders are incurring a
infrastructure construction materials to pick up in the “near disproportionately larger share of the current downturn in
term”. home building.
• “Infrastructure spending is expected to remain high with a • In terms of rankings, Victorian home builder Metricon lead
significant number of projects commencing or in planning for the pack in 2018/19 with 4,473 starts.
commencement,” the company statement says.
• This was followed by Meriton Apartments (3,288 starts),
• “This increased demand is expected to flow through to the ABN Group (2,954 starts), Dyldam Developments (2,722
business in 2020.” starts) and Simonds Group (2,580 starts).
“Construction hits recession territory in threat to national • Metricon was also the largest detached house builder whilst
economy” – The Age 29 August 2019 (national data) Meriton was the largest multi-unit builder and Philip Usher
• The national residential construction sector is facing its Constructions Pty Ltd was the largest builder in semi-
deepest contraction since the GST was introduced, dragging detached housing.
down the overall economy amid warnings that fast-tracking • Perhaps surprisingly, the report shows that larger builders
national infrastructure has now become urgent. are most dominant in the detached home market.
• The Australian Bureau of Statistics on Wednesday revealed • All up, Housing 100 builders soaked up 57 percent of the
overall construction across the economy fell by 5.8 per cent market for detached dwellings – up from 54 percent in
through the three months to June. Over the past 12 months, 2017/18 and 45 percent in 2016/17.
construction was down by 11.1 per cent.
• By contrast, the largest 100 home builders’ share of the
• Residential construction dropped by 5.1 per cent in the semi-detached and multi-unit markets stood at just 16
quarter to be down 9.6 per cent over the past year - the worst percent and 27 percent respectively.
annual performance for the key sector since the collapse
associated with the introduction of the GST in 2000.
• Westpac senior economist Andrew Hanlan said with the
construction sector accounting for 13 per cent of the
economy, the sharp drop in activity through the June quarter
would have a material impact on the national accounts.
• “The housing downturn still has further to go and will weigh
on conditions throughout 2019 and into 2020,” he said.
CITB Economic Update September 2019 | 7ANZ/Property Council Survey – December Quarter 2019 ANZ/Property Council SurveyCouncil
ANZ/Property - December
Survey 2019
December 2019
• The ANZ-Property Council Survey for the December 150
Sep-19
quarter shows a decline in sentiment in Australia’s 144
Dec-19
100 = neutral
property sector nationally. The decline was driven by a
144
fall in commercial property sentiment. Sentiment in the 140
residential sector rose strongly for a second quarter. 134
Confidence Index
• Signs of recovery in the residential property market 130
127
128
have been emerging for some months now, with
126
124
124
123
sentiment turning around convincingly in May. Since 122
118
120
then auction clearance rates have picked up sharply, 116 116
prices have been rising strongly now in Sydney and
Melbourne for two months, and housing finance is 110
starting to pick up. Interest rate cuts (both actual and
anticipated), and regulatory easing have been key 101
drivers of this turnaround. 100
ACT VIC WA AUS NSW QLD SA
• The improvement in residential confidence was Source: ANZ / Property Council Survey December 2019.
concentrated in the eastern states, while confidence in Source: ANZ/Property Council
South Australia and Western Australia fell.
Page 2
Forward work schedule expectations
• The decline in sentiment in the commercial property
sector, while not sharp, continues the downward trend Over the next 12 months in the stateForward
you primarily operate,expectations
work schedule will your forward work schedule
evident since mid-2018. Marked weakness in retail
Over the NEXT 12 MONTHS in the state you primarily operate, will your forward work schedule:
Mar-19 Jun-19 Sep-19 Dec-19
is clearly weighing on the overall commercial sector, 70
12-month forward work schedule expectations index
while concerns over land tax reform appear to have
60
dampened sentiment in South Australia.
• In South Australia sentiment was much weaker 50
across all sectors (office, industrial, retail, tourism,
(net balance)
40
retirement living), and on all metrics (construction,
price expectations, forward orders, employment), with 30
proposed reform of land taxes most likely impacting
sentiment. 20
• Business confidence in South Australia is significantly 10
lower today than it was following the 2016 statewide
blackout. 0
AUS NSW VIC QLD WA SA ACT
• According to the ANZ/Property Council Survey, Source: ANZ / Property Council Survey December 2019.
statewide confidence has decreased from 144 to Source: ANZ/Property Council
101 for the December quarter – the largest national
Page 4
quarterly decrease on record. State economic growth expectations
Over the next 12 months in the state you primarily operate,
• This represents South Australia’s lowest confidence State economic growth expectations
will economic growth be:will economic growth be:
level since 2012 and comes only 18 months after the
Over the NEXT 12 MONTHS in the state you primarily operate,
Mar-19 Jun-19 Sep-19 Dec-19
Premier formed Government at the last State Election. 40
12-month ahead state economic growth expectations index
• South Australia’s confidence levels have been nation-
leading for the past six quarters, but following the
recent State Budget, confidence has deteriorated by 20
43 points.
• South Australia’s quarterly deterioration of 43 points
(net balance)
was the largest drop on record behind SA’s 20 point 0
decrease in 2014 and Queensland’s 17 point drop in
2014.
For South Australia: -20
• State economic growth expectations. Worst result
in nation, quarterly decrease of 45 points, worst result
since March 2014. -40
AVG NSW VIC QLD WA SA ACT
• State Government performance index. Second worst Source: ANZ / Property Council Survey December 2019.
result on record (-27.4), worst result since March 2016 Source: ANZ/Property Council
quarter (-27.7), quarterly decrease of 48 points. Page 7
• Forward work schedule expectations. Second worst
result on record (14.7), worst result since December
2011 quarter (13), quarterly decrease of 44 points,
dropped from nation’s best to worst in one quarter.
8 | CITB Economic Update September 2019Summary of Latest Forecasting Reports • South Australia’s commercial building sector bottomed out
in 2016 and has since rebounded sharply with the volume
Available of work done over the year to March 2019 valued at $2.55
billion, an increase of 36.4% since the trough in the cycle.
Master Builders Association (MBA) South Australia - Building Ultra-low interest rates and the acceleration of employment
and Construction Industry Forecasts, August 2019 growth in the state can be thanked here, and the very short-
term outlook appears favourable with a further gain of 9.5%
• The MBA forecasts are more pessimistic about all sectors of SOUTH AUSTRALIA
anticipated to take place in 2019-20. The bad news is that
BUILDING
South Australian construction than other major forecasters. &activity
CONSTRUCTION INDUSTRY FORECAST
is likely to revert to trend after that with particularly
• New housing commencements in South Australia peaked large declines in the pipeline of work projected for 2020-21
at 13,005 in 2017-18 and are forecast to trough at 8,202 in (-13.1%) and 2021-22 (-16.0%).
2022-23.
• In terms of engineering construction in SA, the fruits of
SA
• Over the year to March 2019, new home commencements government infrastructure commitments are starting to show
up on the ground with the volume of work done reaching
GRAPHS &
in South Australia fell to 10,665 – a drop of some 19% on the
2019
record peak high reached just a year earlier. Along with weak SOUTH
$6.35 billion over the year to March AUSTRALIA
2019 – the highest in six
years, and up by 9.5% on a year earlier. However, as major
TABLES
BUILDING
credit conditions, the local market is battling subdued house & CONSTRUCTION INDUSTRY FORECAST
prices (down by 0.5%) over the year to June 2019 and weak transport infrastructure projects come to a conclusion the
rental price growth (+1.1%). These factors in particular have size of the SA engineering construction sector is likely to
dampened investor demand in the state’s housing market. shrink back to size with a decline of 0.4% during 2019/20 and
a further drop of 3.3% in 2020/21.
• For new home building, the most likely scenario is that
SA
activity will continue to drift lower over the next few years.
RESIDENTIAL BUILDING GRAPHS &
New dwelling starts are projected to decline by 6.3% to 9,945
2019
during 2019-20 before bottoming out at 8,202 in 2022-23. A
TABLES
2.4% rise in 2023/24 is anticipated to bring new home starts
back up to 8,396 – although this volume of activity is still
RESIDENTIAL
some 20.9% lower BUILDING WORK DONE BY SECTOR
than in 2018-19.
$M, chain volume measures, constant 2016/17 prices - Year Ended June
• While new home building is set to move lower over the next
few years,%ch the2009-10
news is2010-11
a little better
2011-12 for home renovations
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
which are expected to 3,104
creep slightly higher over the forecast
RESIDENTIAL BUILDING
Residential Building 3,014 2,764 2,341 2,712 3,046 2,955 3,051 3,419 3,389 3,045 2,826 2,649 2,588 2,620
horizon.
-0.8% 3.0% -11.0% -15.3% 15.8% 12.3% -3.0% 3.2% 12.1% -0.9% -10.2% -7.2% -6.3% -2.3% 1.3%
Houses 2,011 2,072 1,744 1,569 1,766 2,001 1,883 1,957 2,095 2,042 1,901 1,759 1,635 1,589 1,616
Residential Building Work 3.0%
Done By Sector - South Australia
RESIDENTIAL BUILDING
0.4%
WORK
-15.8% -10.0%
DONE
12.5%
BY SECTOR
13.3% -5.9% 3.9% 7.1% -2.5% -6.9% -7.5% -7.1% -2.8% 1.7%
Other Dwellings 560 574 556 363 504 594 633 657 884 894 690 613 561 543 546
$M, chain
$M, chainvolume
volumemeasures, constant
measures, 2016/17
constant pricesprices
2016/17 - Year Ended June
-1.3% 2.4% -3.1% -34.6% 38.6% 17.9% - Year
6.5% Ended
3.8% June
34.6% 1.1% -22.8% -11.1% -8.5% -3.2% 0.6%
Alterations & Additions 444
%ch 2009-10 460
2010-11 466
2011-12 408
2012-13 442
2013-14 450
2014-15 440
2015-16 437
2016-17 440
2017-18 453
2018-19 453
2019-20 453
2020-21 453
2021-22 456
2022-23 458
2023-24
-5.3% 3.6% 1.2% -12.4% 8.2% 1.9% -2.3% -0.6% 0.6% 3.1% 0.0% 0.0% 0.0% 0.5% 0.5%
Residential Building 3,014 3,104 2,764 2,341 2,712 3,046 2,955 3,051 3,419 3,389 3,045 2,826 2,649 2,588 2,620
-0.8% 3.0% -11.0% -15.3% 15.8% 12.3% -3.0% 3.2% 12.1% -0.9% -10.2% -7.2% -6.3% -2.3% 1.3%
Residential Building Houses Other Dwellings Alterations & Additions
Houses 2,011 2,072 1,744 1,569 1,766 2,001 1,883 1,957 2,095 2,042 1,901 1,759 1,635 1,589 1,616
0.4% 3.0% -15.8% -10.0% 12.5% 13.3% -5.9% 3.9% 7.1% -2.5% -6.9% -7.5% -7.1% -2.8% 1.7%
Other Dwellings 560 574 556 363 504 594 633 657 884 894 690 613 561 543 546
-1.3% 2.4% -3.1% -34.6% 38.6% 17.9% 6.5% 3.8% 34.6% 1.1% -22.8% -11.1% -8.5% -3.2% 0.6%
Alterations & Additions 444 460 466 408 442 450 440 437 440 453 453 453 453 456 458
-5.3% 3.6% 1.2% -12.4% 8.2% 1.9% -2.3% -0.6% 0.6% 3.1% 0.0% 0.0% 0.0% 0.5% 0.5%
Source: MBA SA
Residential Building Houses Other Dwellings Alterations & Additions
Number of Dwelling Commencements By Sector - South Australia
NUMBER OF DWELLING COMMENCEMENTS BY SECTOR
Year Ended
Year EndedJune
June
%ch 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
Residential Building 12,314 10,967 9,148 8,992 11,153 10,628 11,279 10,834 13,005 10,618 9,945 8,937 8,304 8,202 8,396
1.4% -10.9% -16.6% -1.7% 24.0% -4.7% 6.1% -3.9% 20.0% -18.4% -6.3% -10.1% -7.1% -1.2% 2.4%
Houses 9,681 8,258 6,939 6,529 8,307 7,780 7,687 7,656 8,204 7,465 7,067 6,435 5,993 5,920 6,050
3.7% -14.7% -16.0% -5.9% 27.2% -6.3% -1.2% -0.4% 7.2% -9.0% -5.3% -8.9% -6.9% -1.2% 2.2%
NUMBER
Other Dwellings
OF DWELLING
2,633 2,709
COMMENCEMENTS
2,209 2,463 2,846 2,848
BY
3,592
SECTOR
3,178 4,801 3,153 2,878 2,502 2,311 2,282 2,346
Year Ended June-6.3% 2.9% -18.5% 11.5% 15.6% 0.1% 26.1% -11.5% 51.1% -34.3% -8.7% -13.1% -7.6% -1.3% 2.8%
Source: MBA SA%ch 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
Residential Building Houses Other Dwellings
Residential Building 12,314 10,967 9,148 8,992 11,153 10,628 11,279 10,834 13,005 10,618 9,945 8,937 8,304 8,202 8,396
1.4% -10.9% -16.6% -1.7% 24.0% -4.7% 6.1% -3.9% 20.0% -18.4% -6.3% -10.1% -7.1% -1.2% 2.4%
Houses 9,681 8,258 6,939 6,529 8,307 7,780 7,687 7,656 8,204 7,465 7,067 6,435 5,993 5,920 6,050
3.7% -14.7% -16.0% -5.9% 27.2% -6.3% -1.2% -0.4% 7.2% -9.0% -5.3% -8.9% -6.9% -1.2% 2.2%
Other Dwellings 2,633 2,709 2,209 2,463 2,846 2,848 3,592 3,178 4,801 3,153 2,878 2,502 2,311 2,282 2,346
-6.3% 2.9% -18.5% 11.5% 15.6% 0.1% 26.1% -11.5% 51.1% CITB
-34.3% Economic
-8.7% Update -7.6%
-13.1% September
-1.3% 2019
2.8% | 9
Residential Building Houses Other DwellingsSouth Australia’s commercial building sector In terms of engineering construction in SA, the
bottomed out in 2016 and has since rebounded fruits of government infrastructure commitments
sharplyAustralia’s
South with the volume of work
commercial done over
building the year
sector are
In starting
terms oftoengineering
show up onconstruction
the ground with
in SA, thethe
to March 2019
bottomed valued
out in 2016 at $2.55
and hasbillion, an increase
since rebounded volume
fruits ofofgovernment
work done reaching $6.35 commitments
infrastructure billion over
of 36.4%with
sharply sincethethe troughofinwork
volume the cycle.
done Ultra low year
over the the
areyear to March
starting 2019up
to show – the highest
on the in six
ground years,
with the
interest and up byof9.5%
workon a year earlier. $6.35
However, as over
to Marchrates
2019and the acceleration
valued of employment
at $2.55 billion, an increase volume done reaching billion
growth major transport infrastructure
2019 – theprojects
highestcome
of 36.4%insince
the state
the can be in
trough thanked here,Ultra
the cycle. and lowthe the year to March in six years,
very short term outlook appears favourable with to a conclusion the size of the SA engineering
interest rates and the acceleration of employment and up by 9.5% on a year earlier. However, as
a further gain of 9.5% anticipated to take place construction sector is likely to shrink back to size
growth in the state can be thanked here, and the major transport infrastructure projects come
in 2019/20. The bad news is that activity is likely with a decline of 0.4% during 2019/20 and a further
very short term outlook appears favourable with to a conclusion the size of the SA engineering
to revert to trend after that with particularly large drop of 3.3% in 2020/21.
adeclines
further in
gain construction sector is likely to shrink back to size
theofpipeline
9.5% anticipated to takefor
of work projected place
in 2019/20.
2020/21 The bad
(-13.1%) and news is that
2021/22 activity is likely
(-16.0%). with a decline of 0.4% during 2019/20 and a further
to revert to trendMBA
afterForecasts
that with particularly large
of Construction drop of 3.3%
Activity in 2020/21.
by Sector to 2023/24
declines in the pipeline
MBAof work projected
Forecasts for constant
($bn,
of Construction prices)
Activity in South Australia by Sector to 2023/24
2020/21 (-13.1%) and 2021/22 (-16.0%). ($bn, constant prices)
$7
MBA Forecasts of Construction Activity in South Australia by Sector to 2023/24
$6 ($bn, constant prices)
$7
(CHAIN VOLUME MEASURE)
$5
$6
$4
BILLIONSMEASURE)
$5
$3
$ BILLIONS (CHAIN$VOLUME
$4
$2
$3
$1
$2
$0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
$1 Residential Building Commercial Building Engineering & Civil Construction
Source: MBA SA
$0 MBA forecast Change in Activity: 2023/24 v 2018/19
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
Residential Building Commercial Building Engineering & Civil Construction
-22.7%
MBA Forecast Change -24.4% -33.8%
in Activity: 2023/24 v 2018/19
MBA forecast Change in Activity: 2023/24 v 2018/19
-22.7%
Residential
-24.4%
Commercial
-33.8%
Engineering & Civil
Building Building Construction
SOUTH AUSTRALIA SOUTH AUSTRALIA
BUILDING & CONSTRUCTION INDUSTRY FORECAST
BUILDING & CONSTRUCTION INDUSTRY FORECAST
3 | Separate forecast reports available for all states and territories. To order, contact: forecasts@masterbuilders.com.au
Residential Commercial Engineering & Civil
Building Building Construction
Source: MBA SA
STRUCTION
NON-RESIDENTIAL BUILDING
3 | Separate forecast reports available for all states and territories. To order, contact: forecasts@masterbuilders.com.au
SA Engineering Construction Work Done 2017/18 SA Non-Residential Building Work Done 2017/18
2017/18 Engineering
SA Non-Residential Construction
Building Work ($M)
Done 2017/18 Non-Residential Building ($M)
Source: MBA SA Source: MBA SA
NON-RESIDENTIAL BUILDING WORK DONE BY SECTOR
WORK DONE BY SECTOR
$M, chain volume measures, constant 2016/17 prices - Year Ended June
16/17 prices - Year Ended June
%ch 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
Non-Residential 2,584 2,595 2,403 2,334 2,410 2,329 2,024 1,982 2,435 2,732 2,992 2,600 2,183 2,032 2,069
5,657 4,473 4,728 5,049 6,169 6,360 6,334 6,126 5,521 4,575 4,211
Building 36.5% 0.4% -7.4% -2.9% 3.2% -3.3% -13.1% -2.1% 22.9% 12.2% 9.5% -13.1% -16.0% -6.9% 1.8%
-7.4% -20.9% 5.7% 6.8% 22.2% 3.1% -0.4% -3.3% -9.9% -17.1% -8.0%
1,518 Retail
1,085 & 976 1,315 219 1,734 224 1,801 3321,799 299
1,311 310
1,104 267
1,008 313
1,143 250 283 384 328 382 336 315 329
wholesale trade
|
-29.6% -28.5% -10.1% 34.8%-35.2%
31.9% 2.2%3.9% 48.2%
-0.1% -9.9%
-27.1% 3.5%
-15.8% -13.9%
-8.8% 17.5%
13.5% -20.2% 13.1% 35.6% -14.4% 16.4% -12.0% -6.2% 4.2%
2,067 10
1,693 2,238 CITB Economic
2,440 47 2,845 Update
31 3,056 September
1023,212 85 2019 2,651
3,100 33 7
1,902 15
1,407 39 38 49 118 98 37 32 38
Transport buildings
-8.4% -18.1% 32.1% 9.0% 43.7%16.6% -33.8%
7.4% 225.9%
5.1% -3.5%
-16.2% -14.5%
-61.7% -28.3%
-79.3% -26.0%
116.1% 164.7% -1.6% 27.5% 143.0% -17.3% -62.0% -12.8% 16.1%
1,361 1,264 1,139 873 186 1,119 2431,094 386992 1,385
254 1,428
224 1,317
210 1,306
143 105 233 239 461 495 262 188 199Australian Construction Industry Forum (May 2019): Australian • While activity across the major projects sector eases, the
Construction Market Report cost of building residential housing has continued to trend
higher, albeit not quite as rapidly as previous years.
• Australia’s pipeline of approved construction projects • CoreLogic’s Cost of Construction Index which tracks the
continues to grow, but a lower proportion of projects are rate of change in residential construction costs indicates the
moving to the construction stage divergence between the National CHIP index and growth in
CPI that has been entrenched since 2003, may be starting to
• The value of new projects added to the construction pipeline ease. Heavy sustained investment in infrastructure projects
hit a historic high of $35 billion in February 2019 before for NSW and VIC continue to put upwards pressure on
dropping to just $9.5 billion in March, which is approximately construction costs while WA and SA both show a decrease in
75% of the five-year median value of new projects and the cost of residential construction.
considered very low. All sectors recorded lower numbers
except mining which recorded a 58% increase at the national
level.
• Projects transitioning from ‘approved’ into the construction
phase have been subdued since September 2018 with
results showing projects entering the build stage currently
sitting at approximately 50% of the five-year median in terms
of both number and value.
• Large projects are likely facing challenges obtaining finance,
especially in the residential multi-unit sector.
CITB Economic Update September 2019 | 11EMPLOYMENT AND UNEMPLOYMENT INDICATORS
Workforce SplitsConstruction
Construction Industry,
SouthSouth
Workforce Splits Industry, Australia ABS Construction Sector Employment
Australia
35.0 Workforce Splits Construction Industry, South - Quarterly Data, August 2019 -
30.0 Australia analysis by CITB
35.0 Workforce Splits Construction Industry, South
25.0
30.0
20.0 Australia • The construction sector has swapped places
35.0
25.0 with manufacturing to become the 3rd largest
15.0
000s
employ in South Australia with employment
30.0
20.0
10.0 reaching a record high in 2018-19. The ABS data
25.0
15.0
000s
5.0 shows the sector employing 74,700 people in
20.0
10.0
0.0 our state in the year to August quarter 2019.
15.0
000s
5.0
Aug-87
Aug-89
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
• On a 5-year comparison, year to August
10.0
0.0 2019 compared to year to August 2014, total
5.0 employment grew by 8,800 or 13.4%. The
Aug-87Aug-87
Aug-89Aug-89
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-11Aug-09
Aug-13Aug-11
Aug-15Aug-13
Aug-17Aug-15
Aug-19Aug-17
Aug-19
Housing Commercial Civil
0.0 largest contributors to this growth were Building
Source: ABS Completion Services and Residential Building
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Housing Commercial Civil Construction (both +3,800), Heavy and Civil
Share of Total Construction Employment - South Engineering Construction (+2,300).
AustraliaCommercial
Housing Civil
50.0%Share
Share of TotalConstruction
of Total Construction Employment
Employment, South-Australia
South
Australia
40.0%Share of Total Construction Employment - South
50.0%
Australia
% of total
30.0%
40.0%
50.0%
20.0%
of total
30.0%
40.0%
10.0%
total
20.0%
30.0%
% of %
0.0%
10.0%
20.0%
Aug-87
Aug-89
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
0.0%
10.0%
Aug-87
Aug-89
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
0.0% Housing Commercial Civil
Aug-87
Aug-89
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
Housing Commercial Civil
Source: ABS
Total Employment
Housing - Construction
Commercial South
Civil Australia
80.0
Total Employment - Construction South Australia
Total Employment - Construction South Australia
Total Employment - Construction, South Australia
70.0
80.0
60.0
80.0
70.0
50.0
70.0
60.0
40.0
000s
60.0
50.0
30.0
50.0
40.0
000s
20.0
40.0
000s
30.0
10.0
30.0
20.0
0.0
20.0
10.0
Aug-87
Aug-89
Aug-91
Aug-93
Aug-95 Aug-95
Aug-97 Aug-97
Aug-99 Aug-99
Aug-01 Aug-01
Aug-03 Aug-03
Aug-05 Aug-05
Aug-07 Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
10.0
0.0
0.0
Aug-87
Aug-89
Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
Aug-87
Aug-89
Aug-91
Aug-93
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
Source: ABS
12 | CITB Economic Update September 2019Aug 18 Jul 19 Aug 19 overall trend labour force underutilisation rate
trend s.a. trend s.a. trend s.a. (those who are unemployed and those who want
NSW 4.7 4.6 4.5 4.4 4.5 4.3 more hours) was 15.9% in August, up from 15.1%
VIC 4.7 4.7 4.8 4.8 4.9 4.9 a year earlier. In August, the national
QLD 6.1 6.3 6.4 6.4 6.4 6.4 underutilisation rate was 13.8%.
SA 5.5 5.6 6.6 6.9 6.8 7.3
WA 6.2 6.4 5.9 5.9 5.8 5.8 PARTICIPATION
TAS 5.9 5.9 6.6 6.0 6.6 6.4
AUST 5.2 5.3 5.2 5.2 5.3 5.3 In trend terms, the participation rate in South
UNDEREMPLOYMENT Australia rose from 63.6% in July to 63.7% in
August. Nationally, the participation rate rose
Unemployment Rates (%) ABS Labour Force - August 2019, Cat.
from 66.1% in July to 66.2% in August—see
outh Underemployed workers are those
CHART 3: UNEMPLOYMENT who
RATES (%)are No. 6202.0
9
employed part-time and who want, and are Chart 4.
gust.
available for, more hours of work than they CHART
Analysis and4: LABOUR
charts fromFORCE
Department of Treasury and
m
PARTICIPATION RATES (%)
Finance, Economic Briefing.
nd currently
8 have. 67
TREND
SOUTH AUSTRALIA
• SEASONALLY
During ADJUSTED
August, the unemployment rate: was 6.8%
The trend underemployment rate in South 66
7 in South Australia in trend terms (5.3% nationally);
Australia was 9.1% in August. As a result the and was 7.3% in South Australia in seasonally
19 overall trend labour force underutilisation rate adjusted terms (5.3% nationally).
65
s.a. (those
6 who are unemployed and those who want • Annual trend employment growth was 1.5% for
more hours) was 15.9% in August, up from 15.1% South Australia and 2.5% nationally.
AUSTRALIA
4.3 64
4.9 a year earlier. In August, the national
AUSTRALIA • In trend terms, the unemployment rate in South
5
underutilisation rate was 13.8%. Australia rose
SOUTH from 6.6% in July to 6.8% in August.
AUSTRALIA
6.4 63 Nationally, the unemployment rate rose from 5.2%
TREND
7.3 in July to 5.3% in August.
SEASONALLY ADJUSTED
5.8 PARTICIPATION
4
62
Other commentary on employment and
Aug-14
Aug-15
Aug-16
Aug-18
Aug-19
Aug-17
6.4
5.3 In trend terms, the participation rate in South unemployment indicators
61
Australia rose from 63.6% in July to 63.7% in
Source: Charts reproduced from Department of Treasury and
Aug-14
Aug-16
Aug-17
Aug-19
Aug-15
Aug-18
August.
In Nationally,
seasonally
Finance. the participation
adjusted terms, Southrate rose
Australia’s “Unemployment Rises Further – Data Wrap”,
from 66.1% in July
unemployment torose
rate 66.2% in August—see
from 6.9% in July to 7.3% South Australian Centre for Economic Studies 20
September
Chart
in 4. Australia’s unemployment rate rose
August.
Labour Force Participation Rates (%) In seasonally
• adjusted
South terms,
Australian the South
unemployment rate confirmed as
from 5.2% in CHARTJuly to 4:
5.3% in August.
LABOUR FORCE
highest in therate
Australian participation nation.
rose 0.3 of a
67
PARTICIPATION RATES (%)
• point
percentage SouthtoAustralia’s
63.9% in trend unemployment
August. rate rose
Nationally,
TREND the youth (15-24 year old)
In South Australia, by 0.2 percentage points to 6.8 per cent in August
unemployment rate wasADJUSTED
SEASONALLY 13.9% in the year to the participation rate rose 0.1 of a percentage
2019, according to ABS Labour Force Survey data.
66
August, up from 13.2% a year earlier and above point to 66.2%.
In comparison, the national unemployment rate
rose by 0.1 percentage points to 5.3 per cent.
the 11.6% rate recorded nationally (annual
65 • South Australia’s trend unemployment rate in
average terms).
August was the highest of any state and territory.
AUSTRALIA The other states with relatively high unemployment
64 rates were Tasmania (6.6 per cent) and Queensland
(6.4 per cent).
SOUTH AUSTRALIA
63 • The recent increase in South Australia’s
Commercial and Economics Branch unemployment rate has been primarily driven
by more people looking for work rather a
19 September 2019
62 deterioration in employment, and this pattern
Aug-19
Public – I2 – A1 2 continued in August. The trend participation rate
rose by 0.1 percentage points to 63.7 per cent in
61 August, its highest level since February 2009.
Aug-14
Aug-16
Aug-17
Aug-19
Aug-15
Aug-18
ia’s
o 7.3%
Source: Charts reproduced from Department of Treasury and
se Finance.
In seasonally adjusted terms, the South
Australian participation rate rose 0.3 of a
) percentage point to 63.9% in August. Nationally,
the participation rate rose 0.1 of a percentage
ove point to 66.2%.
2
CITB Economic Update September 2019 | 13• However, a slowdown in the rate of employment growth has greater than it is today.
also placed upward pressure on the unemployment rate. In
the three months to August 2019 total employment barely • The data is another symptom of the fallout from a consistent
rose, whereas in the three months to May 2019 it rose by 0.5 slide in dwelling approvals, which have seen dramatic falls in
per cent. Hence the current rate of job creation is not enough the 2018 and 2019 financial years.
to keep pace with population growth. • Approvals apartment and house approvals nationally have
• A notable feature of South Australia’s recent labour market slumped 47.3 per cent and 11.7 per cent respectively over
performance is that females have fared much better than the past two years.
males. This trend persisted in August, with total male • The news also came as ASIC released data showing the
employment falling by 1,200 persons, whereas total female downturn was sparking the failure of many more businesses,
employment rose by 1,400 persons. The male unemployment with 556 construction companies going bust in 2018-19 in
rate rose to 7.5 per cent, to be well above the female NSW – 101 more than in 2017-18.
unemployment rate of 6.0 per cent, which also rose slightly.
• Jobs vacancy data, backed up the bad news for the
• Despite the recent rise in unemployment for South Australia construction sector showing a 1.3 per cent decline in new job
there are some positives beyond the marked improvement in listings over the past quarter, suggesting the growth in jobs
labour force participation. Total employment rose solidly over generally was also slowing.
the past year despite the recent slowdown in job formation
(up 1.5 per cent), while gains in full-time employment over • The high rate of underemployment suggests businesses
this period (up 1.5 per cent) have also been retained. The were “trying to keep on good workers but are doing that by
employment-to-population ratio (59.4 per cent) also remains reducing hours”, according to the article.
near its more than six year high. • Callum Pickering (from Indeed) said the widely expected
“Construction jobless hits high, as the downturn bites” employment windfall of major infrastructure projects, to
Article Published in New Daily, 26 September pick up the slack from falling residential construction, wasn’t
coming true.
Note: This is national ABS data. Underemployment is the measure
of how many of those working in a sector would like to have more • “What we’re seeing here is that a lot of these big infrastructure
work. projects are capital-intensive but not labour-intensive –
residential construction is labour-intensive,” he said.
• Underemployment in construction is close to hitting an
all-time high nationally, as the sector shows further signs of • Steve Jovcevski, Mozo’s property expert and a property
the impact of the nation’s economic slowdown. developer in Sydney, told The New Daily things weren’t
looking good for construction, but that wasn’t unexpected.
• Data released by the Australian Bureau of Statistics found “We were building so many apartments in Sydney and
underemployment in the construction sector has hit 81,100 Melbourne it was getting to an area of oversupply,” he said. “The
workers – or 6.9 per cent of the workforce. industry is in holding mode. If things do pick up, then all well and
good, but if they don’t, they’ll look at sacking staff.”
• The figure is among the highest underemployment in
construction since the ABS began collecting the data – only
twice since 1991 has underemployment in construction been
Index Monthly Vacancy Report - August
Yearly % Number of job
IVI - August 2019 (Jan ‘06 %
change advertisements
2019, Australian Government
= 100) change Department of Employment,
New South Wales 80.7 -0.7 -12.1 59,100 Skills, Small and Family Business
Victoria 91.4 -0.2 -7.4 46,000
• Over the year to August 2019, job
Queensland 63.7 0.2 -2.5 31,600 advertisements decreased in three
states and the Northern Territory. New
South Australia 59.4 0.6 3.0 7,800 South Wales recorded the strongest
decline (down by 12.1%), followed
by Victoria (7.4%) and the Northern
Western Australia 88.7 0.7 1.6 16,300
Territory (4.3%). By contrast, the
strongest rises in job advertisements
Tasmania 67.8 1.1 11.3 2,000
were recorded in the ACT (up by 11.9%)
and Tasmania (11.3%).
Northern Territory 72.1 0.6 -4.3 1,800
Australian Capital Territory 181.9 0.9 11.9 5,900
Australia 79.7 -0.1 -6.0 170,500
Source: Department of Employment, Skills, Small and Family
Business, Vacancy Report 2019.
14 | CITB Economic Update September 2019WA 2,615.8 26.0 1.0
TAS 533.3 6.4 1.2
FURTHER ANALYSIS NT 245.6 -1.1 -0.4
ACT 425.7 6.9 1.7
South Australia’s population rose by 0.3% during AUS* 25,287.4 388.8 1.6
the March quarter 2019, to be 0.9% higher than a *Includes Christmas Island, the Cocos Islands and Jervis Bay.
year ago. Nationally, population rose by 0.5% in the
In the 12 months to March 2019 the largest
March quarter 2019 and was 1.6% higher than a
contribution to South Australia’s population
year earlier—see Chart 1.
growth came from net overseas migration, which
POPULATION ESTIMATES totalled 13,700 persons, up 8.4% from the previous
Annual Population Growth 12 ABS Population
months. NaturalEstimates
increase - over
Marchthe Quarter
period
CHART 1: ANNUAL POPULATION GROWTH
2.4%
2019,5,200,
totalled Cat. No.up3101.0
1.6% from the previous 12
months. In the year to March 2019, there was a net
Analysis and
interstate Charts of
outflow from4,000
Department of Treasury
people from andSouth
Finance, Economic Briefing.
2.0% Australia, 29% lower than in the previous 12
• During the year to March 2019, South Australia’s
months—see Chart 2.
Estimated Resident Population (ERP) increased 0.9% (or
AUSTRALIA
14,800 persons) to 1,748,630 people.
1.6% • Nationally, the ERP increased 1.6% to 25,287,400
people.
1.2%
Mar 19 vs Mar 19 vs
Mar 19
Mar 18 Mar 18
(‘000)
(‘000) %
0.8% NSW 8,071.1 114.1 1.4
VIC 6,566.2 133.5 2.1
SOUTH AUSTRALIA QLD 5,076.5 88.1 1.8
0.4%
SA 1,748.6 14.8 0.9
WA 2,615.8 26.0 1.0
0.0% TAS 533.3 6.4 1.2
Mar-12
Mar-14
Mar-16
Mar-09
Mar-10
Mar-11
Mar-13
Mar-15
Mar-17
Mar-18
Mar-19
NT 245.6 -1.1 -0.4
ACT 425.7 6.9 1.7
Source: ABS
AUS* 25,287.4 388.8 1.6
Population growth over the year by jurisdiction,
from highest to lowest was: Victoria (2.1%), *Includes Christmas Island, the Cocos Islands and Jervis Bay.
Components of South Australian Population Change
Queensland (1.8%),
CHART the ACT (1.7%),
2: COMPONENTS New
OF SOUTH
(Moving Annual Totals, ‘000s)
South Commentary on General Economic
AUSTRALIAN POPULATION CHANGE
Wales (1.4%), Tasmania (1.2%), Western Australia
(MOVING ANNUAL TOTALS, '000s) Conditions (various analysis)
(1.0%),
30 South Australia (0.9%) and the Northern
Territory (-0.4%). TOTAL ABS National Accounts – June Quarter 2019, Cat. No.
NATURAL INCREASE 5206.0: Analysis from Department of Treasury and
25
NET OVERSEAS MIGRATION Finance, Economic Briefing and other analyses.
NET INTERSTATE MIGRATION
• The figures show the worst annual economic growth for
20
18 years nationally.
Commercial and Economics Branch
• ABS data shows the national economy grew by 0.5% in
1915
September 2019
the June quarter in seasonally adjusted terms and 0.4%
Public – I2 – A1 1 in trend terms. Through the year the growth was 1.4%
seasonally adjusted and 1.5% in trend terms.
10
• Nationally, government consumption rose by 2.7% in
the June quarter and household consumption spending
5 rose by 0.4%. Recording falls in the quarter were:
dwelling investment (down 4.4%); public investment
(down 2.3%); and new business investment (down 0.4%).
0
• South Australia’s state final demand contracted by 0.2
per cent in seasonally adjusted terms, with only the
-5 Northern Territory recording a worse performance.
• In real trend terms, South Australian State Final Demand
-10
was unchanged in the quarter but was 0.8% higher than
a year earlier.
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
• The ABS said South Australia’s state final demand
performance included weakness in non-dwelling
Source: ABS construction (down – 6.6 per cent), which was driven by
falls in energy-related projects.
Next release of ABS cat. no. 3101.0 is 19 December
2019 CITB Economic Update September 2019 | 15You can also read
