Construction surges in July

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  • Earthmovers & Exacavators

Australia’s construction sector has surged ahead in July according to the latest PCI figures

Commercial -construction -site
  • Apartment building back in growth
  • Commercial construction up record 9.8 points
  • Employment and wages both saw growth

The monthly Ai Group/Housing Industry Association Australian Performance of Construction Index (PCI) revealed the strongest rate of growth since the index’s inception in September 2005.

The overall index gave a reading of 60.5 points (readings above 50 indicate growth), a jump of 4.5 points.

The survey revealed expansion in all four construction sub-sectors (house building, commercial, apartment building and engineering), but it was the house building (up 3.4 points to 62.4) and commercial (up 9.8 points to 64.3) areas that drove the majority of growth.

"The national construction industry has continued its strong run with infrastructure work, a resurgent commercial construction sub-sector and ongoing healthy levels of activity in residential building combining to more than offset the further wind-down of mining-related work," Ai Group head of policy Peter Burn says.

"The long-awaited pick-up in commercial construction seen over the past three months is particularly welcome in light of the anticipated wind-down in apartment building from the very high recent levels and suggests that the national construction industry will continue to play a leading role in the economy for some time to come," Burn says.

The apartment building sector also continued its bi-polar run, returning to growth in July after huge declines in June. Apartment construction numbers have been at record highs, but are expected to slow in future. However, there is still a large backlog of projects before then.

 "The ongoing boom in apartment construction in metro areas, combined with investment in infrastructure projects, is ensuring strong conditions across the sector," HIA principal economist Tim Reardon says.

"The housing industry has been cooling from record highs in 2016 but there remains a significant amount of work in the pipeline."

 

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