australian construction falls in september quarter iron ore plunges again 902672014

According to data from the Australian Bureau of Statistics, the amount of construction work done in the country fell 2.2 per cent in the third quarter, and declined 5.1 per cent for the year, says Sourceable.

This poor performance was mostly attributable to a decline of 3.2 per cent in engineering construction. Though analysts had expected a fall in engineering construction, on the back of falling investment levels in the mining sector, the slump of 1.6 per cent in residential construction raised alarm bells.

“This outcome is slightly disappointing in that the Reserve Bank has looked at this sector to pick up the slack and suggests a possible easing in ‘animal spirits’ that have characterised this sector,” said TD Securities Asia-Pacific strategist Prashant Newnaha, “The slowdown in quarterly data suggests that the transition from mining to non-mining is proceeding at a slow pace.” he added.

Meanwhile, The Australian reported that iron ore prices continued their decline and reached a new five-year low in overnight trade. Spot iron ore at the Chinese port of Tianjin traded at US$68 per tonne, losing 0.9% from the previous close of AU$68.60, as large Australian miners kept up supply momentum in the face of sluggish Chinese demand. At these prices, iron ore is down 50 per cent for the year.

In its most-watched meeting in years, the Organisation of Petroleum Exporting Countries (OPEC) is split down the middle on whether members should implement production cuts to counter a crash in crude oil prices, says the Sydney Morning Herald. The once powerful oil cartel is meeting today in Vienna, amidst a scenario of global oversupply in crude that has been compounded by weakening demand out of Europe and Asia. Crude oil has fallen over 25 per cent since June and is trading around US$78 a barrel, a four-year low. "OPEC is split: the majority don't like the current price levels, the minority doesn’t mind," said Kamel al-Harami, former president of Kuwait Petroleum International, a state oil company.

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