CommSec has released its latest State of the States report, outlining how each state and territory in Australia is faring in the economy. The news is good for most areas, with Western Australia coming out on top overall and Northern Territory making a huge jump in economic performance. But what does this mean for the construction industry?
Construction in all states and territories except for Tasmania grew over the September quarter. This covers the total amount of residential, commercial and engineering work completed during this time.
Tasmania is the weakest state when it comes to construction, with overall construction work completed down almost 10 per cent on its decade average.
The Northern Territory, however, is up by almost 79 per cent on its decade average of completed construction progress, closely followed by Western Australian and Queensland. Annually, the Northern Territory's September quarter construction rate rose by 18.5 per cent.
Reflecting these strengthening construction figures are the statistics showing dwelling starts. Overall, the outlook for housing construction has improved due to state government grants and low interest rates. The ACT had 57 per cent growth in dwelling starts over decade averages, and the September quarter results were just over 27 per cent higher than during the same period the year earlier. This is the strongest annual gain in two years.
Northern Territory came in a close second, with a 40 per cent increase in dwelling starts compared to decade averages. However, September quarter figures were down by 11 per cent on the previous year.
New South Wales also achieved growth in dwelling starts, increasing by just over 28 per cent on the decade average. Western Australia followed behind with a 22 per cent boost.
Unfortunately, the construction lag in Tasmania followed through to dwelling start figures, with decade averages down just over 31 per cent. South Australia also returned a loss, with a 13.5 per cent decrease in growth.
These dwelling starts can be driven by population growth and new housing finance options in certain areas, affecting everything from unemployment levels to retail trade and overall economic growth.
Interestingly, while the Northern Territory performed well in the areas of construction and dwelling starts, it ranked last in housing finance figures. Trend commitments were down over 19 per cent on its decade average.