The Ai Group/HIA Australian Performance of Construction Index peaked at an all-time high in March as the HomeBuilder deadline forced a frenzy of project commencements.
Rising by 4.4 points to 61.8, the joint Australian Industry Group (AiG)/Housing Industry Association (HIA) index hasn’t seen such numbers in its 16-year history. Readings above 50 indicate expansion in activity, with higher results indicating a faster expansion.
AiG’s head of policy Peter Burn said records were tumbling all over the report.
“Employment grew at the most rapid pace in the history of the series and wages rose faster than at any time since the Global Financial Crisis. Input prices surged due to a combination of high demand, supply constraints and rising freight costs for imported inputs,” Burn said.
“New orders went through the roof in March, in part fuelled by the looming cut offs for the HomeBuilder program. While this surge in new orders is very likely to fade from here on, work will continue to flow through construction supply chains for many months and will provide ongoing stimulus to the sector and the broader economy.”
While the overall PCI continued to climb, growth for apartment, commercial and engineering activity was slower compared to residential growth.
According to the report, reasons for the growth besides the HomeBuilder deadline were low interest rates, pent-up demand, cashed-up householders, the re-entry of residential investors and the newfound popularity of regional and suburban locations.
The biggest concerns stated were around supplier delays and more costly import and freight costs.
The PCI is a seasonally adjusted index based on industry activity, new orders, deliveries and employment with respective weights. A PCI reading above 50 points indicates that construction activity is generally expanding; if it is below 50, it is declining. The distance from 50 is indicative of the strength of the expansion or decline.
For more information about the latest PCI results, visit the Ai Group website.