Housing boom begins to stumble

The aggregate value of construction across Australia fell 0.8% in the country’s third quarter, its second consecutive quarter of decline, the Australian Bureau of Statistics said.

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By  Eudore Chand Published  December 1, 2003

The aggregate value of construction across Australia fell 0.8% in the country’s third quarter, its second consecutive quarter of decline, the Australian Bureau of Statistics said. A huge 3.5% fall in engineering construction, which includes large national infrastructure projects, accounted for the bulk of the slide, but residential investment rose 1.1%. The dip, however, comes at the end of a construction boom in Australia, and has been shrugged off by economists who remain optimistic that there is long-term strength in the market. “Overall it’s soft for the quarter and this will temper some forecasts of 3Q GDP. But the bottom line is there is no reason to be concerned about the pace of growth,” said Anthony Thompson, senior economist at HSBC, in a Dow Jones report. The Australian economy has shown clear signs of a strong rebound from a weak war-affected second quarter with export receipts improving sharply while business and consumer confidence levels have risen. Economists say the third quarter will also be free of things like SARS and the worst affects of drought which devastated Australia’s farm sector in 2002-2003. The global economic picture too has brightened considerably. Housing construction data in the third quarter was softer than expected, but still firm rising by 0.7% from the second quarter.

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