Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go Hmmm...one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Thursday, 2 April 2015

Engineering construction holds up (Icythys)

Construction holds up in Q4

The ABS released its Engineering Construction Activity data yesterday, a data set which is thought to be a fair proxy for mining and resources project construction.

Contrary to fears, declines in the quarter were only moderate. 

The seasonally adjusted estimate for the value of total engineering construction work done fell by just 0.6 per cent in the December quarter to $27.85 billion.

That said, over the past year activity has declined by 12.4 per cent in seasonally adjusted terms.


State by state

The main reason for the decline having been arrested appears to be record spend in the Northern Territory, with some $4.2 billion of engineering construction activity across the past two quarters.

The ABS provides few details concerning what has led to the tremendous spike since Q3 in engineering construction in the Northern Territory.

However, cost blowouts at the $34 billion Ichthys LNG project have been reported elsewhere associated with the struggling UGL Engineering, while Inpex continues to report project progress in its regular updates. 


Elsewhere there was something of a bounce in construction spend in Western Australia - the sceptic would say that this is likely some of the wash-up from the Gorgon overruns, taking the total project spend well beyond $50 billion - and New South Wales.

Pipeline slip, sliding away...

The value of engineering construction work commenced - which by its very nature a lumpy data series - implies that the commencements "big ticket" mega projects now lie in the past.

The engineering construction pipeline is clearly set to experience an ongoing reduction.


Finally, the value of engineering work yet to be done in Queensland shows that the trend is clearly down.

Unfortunately the ABS surveys for Western Australia and the Northern Territory - two of the key players in mining capex - are not available for publication, and therefore we are left to speculate as to how fast the level of activity will fall away.

Estimates by some bank analysts suggest that the fall may be rather severe.


In short, despite a solid result in Q4 2014, we can expect to see resources capex winding down substantially over the next couple of years.

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A snapshot of the Gorgon LNG project, reportedly 90 per cent complete as at the end of January 2015. See here for more astonishing site photos.