LNG Facilities Spike Australian Construction in September

Australian construction activity surged again in the September quarter, bolstered by infrastructure work and increasing activity by 16 per cent to $61 billion.

The ABS figures factored in major mining projects with the value of engineering work jumping by 33 per cent to $34.2 billion. The work likely reflects the arrival of two large floating LNG facilities from offshore.

"We suspect today's outperformance reflects the ABS' policy of marking the full value of mining related structures as 'work done' in one lump when installation is completed, rather than incrementally over time," JP Morgan economist Tom Kennedy said in the AFR.

[Related reading: Engineering Work Continues to Buoy Australia’s Construction Sector]"Anecdotal reports suggests the catalyst behind the 3Q surge was the importation [of] a large LNG platform in Western Australia."Across completed building work, the seasonally adjusted estimate fell 0.4 per cent to $27.6 million in the September quarter.

The latest Australian Industry Group-Australian Constructors Association Construction Outlook survey forecast 7.1 per cent growth in Australia’s construction output for 2017, followed by a further jump of 6.8 per cent in 2018-19