Run of expansion continues for Australian construction

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The Australian construction industry has recorded its fifteenth consecutive month of expansion, according to the latest Australian Performance of Construction Index (PCI).

April -PCI-results

The monthly industry survey, compiled by the Ai Group and Housing Industry Association, gave a reading of 55.4 for the month of April (readings above 50 indicate growth). The result represents a slight slowdown in expansion, with non-residential construction leading the way.

"Australia's construction sector continued to expand in April," Ai Group head of policy Peter Burn says.

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"However, there are suggestions of an easing in conditions. April saw a moderation in both activity and new orders growth, although businesses continued to increase their employment levels in a strong sign of an industry still confident in its overall near-term outlook.

"A growing pipeline of major project work saw strongest growth in the commercial and engineering construction sectors," Burn adds.

"In contrast, the retreat in apartment building is continuing while the housing sector stabilised in the month – consistent with building approvals data which are below their peaks and continue to point to a cooling in housing construction."

HIA representatives say that the lift in commercial construction has been a long time coming, but cautioned that the gains may be offset by a slowdown in residential construction.

"The Australian PCI report continues to illustrate the divergent conditions affecting the various parts of the nation's construction industry," HIA senior economist Geordan Murray says.

"On balance it presents a positive outlook for the remainder of 2018. The improved investment outlook for non-mining businesses is translating into the long-awaited improvement in demand for commercial construction.

"This is a timely development but the overall economic impact is likely to be somewhat negated by a slowdown in apartment construction," Murray says.


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