Building and construction work done rose modestly overall in the March quarter, but there is a growing divide between building and mining-related engineering construction, according to Master Builders Australia, the peak body for the building and construction industry.

Construction work in chain volume terms, seasonally adjusted, was valued at $42.327 billion in the March quarter, compared with $42.041 billion in the December quarter, the Australian Bureau of Statistics (ABS) said today.

The median market forecast was for a 1.5 per cent rise in the quarter.

Engineering work rose 4.6 per cent to $22.30 billion. Seasonally adjusted non-residential building work was down 10.2 per cent, while total building work fell 3.4 per cent to $20.02 billion for the quarter.

Mr Peter Jones, Master Builders Australia’s Chief Economist said, “The latest figures show parts of the industry struggling, confirming evidence from Master Builders’ surveys showing that builders’ face difficulties in commercial and residential areas as stimulus spending programs wind down.”

“Both residential and non-residential building remain below par, although the backlog of work to be done in the residential sector is more promising than in the non-residential sector, where work in the pipeline is down by one quarter on a year ago.”

According to him residential building, after promising so much, runs the risk of remaining weak as Reserve Bank rate rises and finance constraints act as a handbrake on the upturn.

Another strong increase in engineering construction in the quarter confirms an acceleration in growth as mining-related projects appear from the huge pipeline of resources-related work, he said, while the residential building upswing faces ongoing challenges with the non-residential building sector desperate for private sector growth drivers to replace government programs.

Mr Jones said “For the building and construction industry overall, a sectoral divide is opening up, with strong engineering construction fed by the mining boom contrasting with a weak building sector caught in the slow lane of a post GFC economy struggling to transition to a private sector led recovery.”