Australian construction keeps growing in October

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The Australian construction industry has continued its impressive run of expansion in October, according to the latest Australian PCI figures.

October -PCI
Engineering construction was the big driver in October

The monthly index, compiled by the Australian Industry Group (Ai Group) and the Housing Industry Association (HIA), gave a reading of 53.2 for October with readings above 50 indicating growth.

Although still expanding, the reading represents a slowdown in growth of 1.5 points over September’s results.

The Ai group says engineering construction and house-building were the big drivers in October, and figures relating to employment and future projects are positive news for the industry.

"The positive run continued for the construction sector in October on the back of further growth in the house-building and engineering construction sub-sectors and despite flat commercial construction and another month of contraction in the apartment sub-sector," Ai Group head of policy Peter Burn says.

"Construction industry employment also expanded and a lift in new orders points to further overall growth in the months ahead. Nevertheless, the outlook for the apartment sub-sector is for a continuation of the orderly retreat from historically high levels that has been evident over the course of 2017.

"There may still be plenty of cranes visible on new apartment sites but there are now many less than was the case a year ago," Burn adds.

Across the four construction sub-sectors, it was engineering construction that saw the greatest expansion after jumping 4 points to 60.9 for the month. The reading is actually a 10-year high for the sector and comes on the back of rising non-mining infrastructure work.

HIA representatives say the result highlights the varied nature of Australian construction.

"The Australian PCI outcomes for November 2017 paint a diverse picture of Australia's construction industry," HIA principal economist Tim Reardon says.

"This is consistent with the large differences in construction industry conditions across sectors, sub-sectors and regions."

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