The latest ABS release of construction data shows that the value of building work done for Victoria edged up in the December 2016 quarter, whereas engineering construction dipped marginally.

The total building construction work completed recorded approximately $7.78 billion in seasonally adjusted terms in the December 2016 quarter (Chart 1), up by around 4.4 per cent on the September quarter or an annualised growth of around 4.1 per cent. Total value of building construction work done for 2016 was estimated at over $30.6 billion (Chart 2), compared to up to $29.5 billion for 2015.

Meanwhile, the value of engineering construction work done recorded some $2.85 billion during the same period (Chart 1), having dipped by -2.5 per cent on the previous quarter but grown by around 7.9 per cent compared to the same period last year. Total value of building construction work completed for the past year recorded approximately $11.6 billion (Chart 2), a growth of 10.9 per cent over 2015.

Although the monthly engineering construction data suggests a decline, put in context, engineering construction activities in Victoria remained buoyant and the value of work done was still at a relatively high level. As the state continues with its commitment to large scale infrastructure investment state-wide, in particular transport projects, engineering construction activities are expected to remain stable over the short to medium term.

In comparison, building construction recovered in the last quarter of 2016, reflecting the rebound in new dwelling approvals at the turn of the year, in particular apartments and units. However, as the market remains cautious about the potential risks of supply in the inner suburbs, building activities are more likely to gradually move away from the recent peaks over the short term, albeit they will likely remain at healthy levels as the fundamental drivers of growth remain positive.