The ABS confirmed today that Australia has avoided a technical recession through growth in the March quarter of 0.4% seasonally adjusted.
Dr. Andrew Wilson, Senior Economist at Rider Levett Bucknall commented, "The rise this year in housing construction activity spurred on by the First Home Owners Grant has contributed significantly to this positive result and has laid the foundation for a sustained general revival in housing construction through 2009 and into 2010."
"The story for non-residential construction is however not as rosy." Dr. Wilson added. "As indicated by the latest building approval data released by the ABS yesterday, activity levels continue to plummet in most states with year to date comparisons in most instances over 50% below the levels recorded for the same period in 2008. "
Rider Levett Bucknall believe the implications going forward of this generalised continued steep decline in planned non-residential activity are significant, given the lengthy production timelines typically involved in this sector. On the ground activity is yet to reflect the decline in planned activity, however the prospect of significant labour shedding in the industry in the near future is still very real.
Dr Wilson continued,"The sheer volume of the level of decline in planned non-residential construction indicates a difficult task for governments to adequately supplement disappearing construction work through stimulus packages and general infrastructure spending."
Whilst arguments regarding the actual nature of Australia's economy i.e. whether we're in a technical recession etc, will come and go, the fact remains that the last example of a decline in non-residential construction activity throughout the country at these levels was in 1990 to 1991, during Australia's last "technical" recession.