PERTH (miningweekly.com) – The value of projects currently under construction in Australia fell by A$6-billion in the September quarter to A$814.3-billion, advisory firm Deloitte Access Economics reported on Thursday.

The 0.7% quarter-on-quarter decrease was owing to major liquefied natural gas (LNG) projects wrapping up construction.

Deloitte Access Economics reported that the value of definite projects in the database decreased by nearly A$13-billion during the quarter, or by 3.1%, taking the value of definite projects to its lowest level in four years.

However, the value of planned projects in the database increased by A$6.7-billion during the quarter.

However, Deloitte Access Economics noted that the increase in the value of planned projects could not save the project pipeline from falling to just under A$48-billion, below where it was during the same time last year.

The advisory firm noted that there was a strong connection between declining commodity prices and the pipeline of future Australian business investment.

“The lower commodity prices go, the worse the outlook for investment becomes. Yet, there are limits to how bad the outlook can get. Even if commodity prices continue to fall, it is likely that most of the damage to the engineering construction sector has already been done,” Deloitte Access Economics said.

Conversely, commercial construction activity in Australia has improved moderately over the past year, but the improvement has been dwarfed by the collapse experienced in engineering work.

“The fundamentals are turning in favour of the commercial construction sector, higher asset prices are making consumers richer, low interest rates mean capital is cheap and a lower Australian dollar is good news for export competing sectors.”

Deloitte Access Economics noted that the good news for the domestic outlook was that resource export volumes had been rising rapidly and, up until recently, the increases in volumes had been outpacing falling prices.

“But commodity price falls are now leading to falling resource export values,” the advisory firm said.