Construction continues bull run in November

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Australian construction has continued its bull run in November

November -PCI-results

The latest Australian Performance of Construction Index (Australian PCI) showed construction sector activity had expanded for the tenth consecutive month.

The index, compiled monthly by the Ai Group and the Housing Industry Assosciation, gave a reading of 57.5 points for November (readings above 50 indicate growth). This was a 4.3-point increase from the previous month’s survey, continuing the sector’s bull run.

The Ai Group says the positive result is thanks to activity in engineering construction, commercial construction and house building.

"Activity in the construction sector which has been expanding for most of the year accelerated further in November as higher activity levels in both engineering construction and house building were backed up by a surge in commercial construction," Ai Group head of policy Peter Burn says.

"The well-established trend decline in apartment building continued as this sub-sector scaled back from the very high levels of recent years.

"The granular sub-indexes in the Australian PCI point to strong employment growth (November was the seventh consecutive month of expansion) and provide further evidence of a steady pick-up in wages. With new orders also in positive territory, the sector looks like closing 2017 on a high," Burn adds.

Engineering construction in particular is riding high at the moment, with the November PCI results showing the sector is at an 11.5-year high at 64.1 points. The expansion is being driven by the roll-out of large-scale infrastructure projects around the nation.

The free-standing house building sector also saw a strong jump, recording an 8.2-point increase over the previous month to jump to 61.3 points.

"With interest rates set to remain at record lows for longer than expected, the short-term outlook for new home building is stronger and today's Australian PCI result for detached house building is evidence of this," HIA senior economist Shane Garrett says.

 

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