ASX construction shares like Brickworks Limited (ASX: BKW) are having a rough day on the open market. The price falls come after the NSW government imposed a two-week ban on construction in Sydney in an attempt to curb the spread of COVID-19.
At the time of writing, shares in Brickworks are down 2% to $24.47, Reece Ltd (ASX: REH) shares are falling 2.06% to $22.84, and the CSR Limited (ASX: CSR) share price is 2.52% lower to $5.41. The S&P/ASX 200 Index (ASX: XJO) is 1.13% lower.
Let's take a closer look at the news.
ASX construction shares fall on NSW ban
On Saturday, NSW Premier Gladys Berejiklian announced from Monday (today) all non-urgent construction, renovations, and related works would stop in the Greater Sydney Area until at least 31 July. The state is averaging 100 cases per week on the latest figures.
There has been coronavirus transmission on construction sites in the state. The government hopes it will lead to a sizable fall in daily cases.
According to the Sydney Morning Herald (SMH), the ban on construction will cost the state economy $700 million a week. Construction is the fourth-largest employer in the country and NSW is the largest economy of all the states. The ban is being felt across the industry, as seen by the steep falls in the price of ASX construction shares.
The whole market is taking a beating today
It's not just ASX construction shares that are suffering today. The whole market is down – most likely due to lockdowns in NSW and Victoria in Australia and the falling US markets.
The ASX 200 is down over a full percentage point, the steepest fall in the market in over a month. Outside of construction materials, the biggest fallers are in mining and retail.
Healthcare shares are bucking the trend and are up today.
ASX construction share price snapshot
ASX construction shares have held up pretty well during the pandemic up until this point.
Companies like Brickworks and CSR hit all-time highs over the past year as construction was one of a few industries to be allowed to operate during outbreaks (until today). These companies also benefited from the property boom in Australia's two largest cities, which fuelled construction activity.