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Australian PCI enjoys September lift

 

The Australian Performance of Construction Index (PCI) has bounced back in all states and territories outside of Victoria for September.

The Australian construction industry’s overall performance eased in September, with the Australian PCI seeing a 7.3-point improvement to 45.2 points.

The Australian PCI has found that construction activity resumption is varied from state to state following the initial impacts of COVID-19 in the second quarter.

Construction activity in Western Australia and South Australia turned positive (both above 50 points), and New South Wales and Tasmania recorded a stable 50 points. Queensland’s PCI results saw improvement but remained just below the 50-point margin.

However, due to COVID-19 restrictions, Victoria sank back to results below 30 points, with another month of contraction expected in October.

Australian Industry Group (Ai Group) head of policy Dr Peter Burn said the construction sector can look forward to growth in 2021 if Victoria’s COVID-19 restrictions are eased.

“While the Australian construction sector continues to contract, there are gathering signs of a tentative turnaround,” Burn said.

“Outside of Victoria, construction conditions improved marginally in September with more distinct gains in South Australia and Western Australia.

“In contrast, Victorian construction remained in a deep trough.

“If hopes for easing of the Victorian restrictions and for further fiscal support in the Federal Budget are realised, the construction sector should be in a position to contribute to overall growth into 2021.”

New orders continued to see contractions in apartment building (43.3), commercial building (45.8) and engineering activity (29.5) in September, while house building took a positive turn to 56.9. Contraction refers to an index result below 50.

The Australian PCI’s activity index also increased to 42.4 in September, but remained in contraction.

According to the Australian Bureau of Statistics (ABS), value-added output from Australia’s construction industry saw an 8.2 per cent reduction quarter over quarter and a 10.3 per cent per annum drop nationally in the second quarter.

September marked the 25th consecutive month of contraction for the Australian PCI.

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