The Australian construction industry has recorded a 14th consecutive month of expansion in March according to the Australian Performance of Construction Index (PCI).
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The monthly industry survey – compiled by the Ai Group and the Housing Industry Association – gave an overall reading of 57.2 for March (readings above 50 indicate growth).
The Ai Group says the positive result is thanks largely to the boom in commercial and engineering construction, which is covering the slowdown in apartment construction.
“The expansion of Australia’s construction sector continued in March led by gains in commercial construction and infrastructure work and supported by robust levels of activity in house building,” Ai Group head of policy Peter Burn says.
“The orderly retreat from boom conditions in the apartment building sub-sector also continued in March – the Australian PCIhas recorded an expansion in apartment building activity in only one of the past eight months.”
Representatives of the HIA noted the residential construction sector is undergoing a switch from a focus on building apartments to building detached housing.
“There is a rebalancing underway in the composition of new dwelling construction,” HIA senior economist Shane Garrett says.
“The latest Australian PCI indicates that detached house building continues to expand, a trend corroborated by ABS data last week which showed detached house approvals at a two-year high. New apartment building is coming under pressure as a result of APRA restrictions and higher obstacles to foreign buyers.”
The survey also showed that the construction industry as a whole is having a positive impact on the wider Australian economy, with employment and wages both expanding in March.
“Construction maintained its strong contribution to Australia’s workforce with employment in the sector growing for the eleventh month in a row,” Burn says.
“In recent months healthy activity levels have been accompanied by a gradual acceleration of wages, input costs and selling prices.”