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Construction industry continues strong streak


The Australian Performance of Construction Index (Australian PCI) has recorded its strongest result since July 2017 in its fourth consecutive month of recovery.

Seasonally adjusted results for the Australian PCI were up by 2.3 points in December 2020 and January 2021 to 57.6.

This reflected a swifter recovery pace, with house building (65.3), commercial building (62.5) and engineering construction (53.3) all maintaining results above the 50-point margin.

House building activity regressed by 1.7 per cent from November 2020, while commercial construction building activity has spiked by 9.7 per cent.

The new orders index reached its highest score since March 2018 at 58.6, which is expected to bolster building activity for up to six months.

Apartment building activity remains in contraction (45.5), but grew by 4.6 points.

Government support packages have enabled commercial building, housing construction, engineering construction and renovations to recover across all states, the Australian PCI found.

The Australian PCI stated builders are reportedly “nervous” that orders will slow during 2021 as Federal Government grants cease.

Australian Industry Group (Ai Group) head of policy Dr Peter Burn said the strong results have cemented Australia’s recovery.

“The stronger performance of Australia’s construction sector over the months of December and January is further evidence of the extension of the recovery from the depths of the COVID-19 crisis,” he said.

“House building remained strong and the pace of improvement accelerated among the commercial builders. Engineering construction maintained a gentler expansion and apartment building, which has lagged for some time, continued to do so although the pace of decline was arrested.

“Notwithstanding the good news on recent activity and with interest rates set to remain low for several years, with immigration on hold there will be limited opportunity for residential construction, and particularly the apartment sector over the course of 2021.”

The Australian PCI is a survey conducted by the Ai Group and the Housing Industry Association of Australia.

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