Oz construction continues to expand

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The Australian construction industry has extended its stellar run of expansion into an 18th consecutive month, according to the latest Australian Performance of Construction Index (PCI) results.


The monthly survey – compiled by the Ai Group and Housing Industry Association – gave a reading of 52.0 points for July, with readings above 50 indicating growth.

The Ai Group was positive about the result, but cautioned the substantial and sustained drop in apartment construction could drag on the building industry as a whole.

"A stronger showing from the engineering construction sub-sector outweighed a sharp fall in apartment building activity and broadly stable levels of activity in both house building and commercial construction in July," Ai Group head of policy Peter Burn says.

"To date there has been a very orderly retreat from historically high levels of apartment-related activity. The overall resilience of the construction sector will be tested if the lower levels of activity and new orders for the apartment sub-sector continue into the months ahead."

The Housing Industry Association was also upbeat about overall construction levels, but expressed concern for the lack of new apartment projects in the pipeline.

"The Australian PCI continues to identify the cyclical change in the sectors that are driving growth in construction," HIA senior economist Geordan Murray says.

"While there is still a lot of construction activity occurring, the apartment pipeline is not being replenished with new projects at the same rate that projects are being completed.

"Expansion in the amount of work on engineering construction projects is making up for the easing activity in the apartment sector. On balance, construction activity continues to grow, albeit at a more subdued rate than we were seeing last year," Murray adds.


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