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Continued expansion in the Australian construction sector

Published by
World Cement,


According to data from the Australian Industry Group, the national construction industry continued to expand in July 2014. The latest Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) stood at 52.6 (rising by 0.8 points). The 50-point level separates expansion from contraction.

Three of the country’s four construction industry subsectors recorded growth during the reporting period:

  • Commercial construction was up 11.4 points to 61.2 (the highest level in over six years).
  • Apartment building increased by 2.7 points to 51.9.
  • House building was down 3.4 points to 53.2 but continued to expand.
  • The engineering construction sector contracted, falling by 3.9 points to 47.2.

Peter Burn, Australian Industry Group Director – Public Policy, commented on the results: "The residential and commercial construction subsectors are building a head of steam with a welcome strengthening in activity, an upturn in employment, further growth in new orders and more attractive selling prices. In July, momentum in these sub-sectors ensured the overall construction sector remained in positive territory despite the ongoing slowdown in engineering construction as investment in mining-related projects fades. While house building has been strong for some time and apartment building is at healthy levels, the broadening of growth to include commercial construction is a welcome addition to the mix. With fewer resources committed to expanding the mining sector, there is plenty of engineering construction capacity becoming available to accommodate a lift in infrastructure investment."

Furthermore, Housing Industry Association Chief Economist, Harley Dale, noted: "A second consecutive expansion in the Australian PCI® in July, driven by three of the four subsectors, is a tick in the box for the Australian economy as well as the construction industry itself. Labour market outcomes as well as economic growth will be assisted in 2014/15 by Australia's construction industry, led by what is already a strong recovery in new home building activity. The Australian PCI® activity and new orders sub-indices for houses and apartments are providing a further signal that the building approvals cycle has peaked, within which approvals should remain at historically elevated levels for a time yet. In terms of actual construction activity, a more concerted focus on housing policy reform would greatly assist the prospect of extending the current up-cycle beyond this year."


Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldcement.com/asia-pacific-rim/18082014/continued-expansion-in-the-australian-construction-sector-306/


 

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