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/