The Australian construction industry has lifted in February, with the Australian Performance of Construction Index (Australia PCI) results showing a 5.4 point growth to 53.1 points.
The index is compiled each month by Housing Industry Association (HIA) and the Australian Industry Group (Ai Group), with readings above 50 indicating growth.
February’s result of 53.1 points was the highest reading since mid-2016 and the first month of expansion after four consecutive months of decline.
Both industry groups indicate the growth is driven primarily by detached house building, with gains in commercial and engineering construction also contributing to the positive results.
“The construction sector bounced into expansion in February led by a very strong lift in house building and backed by gains in commercial and engineering construction,” Ai Group head of policy Peter Burn says.
“These gains easily offset a further decline in new orders in the apartment sub-sector and underwrote a solid lift in overall employment in the industry as businesses increased their capacity,” Burn continued.
Wages in the sector continued to rise (up 2.8 points to 63.8) as did input prices (up 10.5 points to 76.1), but the report suggests these costs are beginning to be passed on to the customer with the selling prices index rising 0.7 points to 56.0.
HIA said the results were good news not just for construction workers and developers, but for all suppliers connected to the industry.
“This February update for the Australian PCIproves there is still life left in Australia’s new home building sectors,” HIA chief economist Harley Dale says.
“The gem in today’s result – for manufacturers, suppliers, sub-contractors, builders and the many other market participants – is the relatively strong showing for detached housing.”