Industry News, Management, Materials Handling, News, Supplier News

Construction roars back to life in October



The Australian construction industry saw a steep rise in activity during October, according to the Australian Performance of Construction Index (PCI).

Presented by the Australian Industry Group (Ai Group) and the Housing Industry Association, the Australian PCI rose 4.3 points overall to a score of 57.6, seasonally adjusted – where scores above 50 indicate growth.

Overall building activity jumped by 15.4 points to a score of 65.2, inspired by a lift in all four building sectors – housing, apartments, commercial and engineering.

These sectors were led by commercial building which jumped 21.3 points to 62.5, while engineering activity remained the fastest growing at 76.9.

Employment and new orders were the only indicators to report a decrease, if only marginally by 0.2 points in both categories.

Ai Group’s chief policy advisor Peter Burn said this rally was expected to occur and is expected to continue as COVID-affected states return to normal in line with vaccination rates.

“The healthy leap in activity levels across the Australian construction sector in October is a taste of what is expected to be a strong rebound for the broader economy over the next few months as New South Wales, Victoria and the ACT, liberated from COVID restrictions, catch up with the rest of the country and as barriers to the movement of people within Australia are removed,” Burn said.

The danger, according to Burn, will come as an already busy sector becomes busier with the recommencement of several states’ construction sectors.

“A high volume of new orders in October added to the already healthy pipeline of building and construction activity and will further stretch capacity limits and re-expose underlying shortages of skilled labour in many occupations over coming months,” he said.

HIA economist Tom Devitt said this pipeline was leading to a rise in home sales across the eastern states, as homebuyers eagerly returned to the streets.

“Housing market confidence has bounced back in October as restrictions in Sydney and Melbourne eased,” Devitt said.

“A healthy volume of new detached home sales is still entering the pipeline, six months since the end of the HomeBuilder stimulus. This will maintain a significant level of on the ground activity over the coming 12 months.”

The Australian Bureau of Statistics (ABS) has also released its building approvals data for the month of September, which saw a fall of 4.3 to approved dwellings.

This came as the effects of government stimulus – the HomeBuilder Scheme – wore off, according to ABS director of construction statistics Daniel Rossi.

“The decline in private house approvals over recent months can be largely attributed to the end of federal and state stimulus measures,” Rossi said.

“Despite the fall in September, the series remains 18.2 per cent higher than the pre-pandemic level in September 2019.”

More reading

Promise in the pipeline as construction stabilises

Australian PCI free falls from August lockdowns

Send this to a friend