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November construction maintains sustainable growth


Australia’s construction industry maintained its buoyancy in November as the country continued its freedom from lockdown lows, according to the Performance of Construction (PCI) Index.

Presented by the Australian Industry Group (Ai Group) and the Housing Industry Association, the seasonally adjusted Australian PCI fell by just 0.6 points to a score of 57 – where results above 50 points indicate expansion.

Ai Group’s chief policy advisor Peter Burn said construction was playing a significant part in the country’s economic recovery.

“The strong rebound of the Australian construction industry continued into November with healthy growth in engineering construction and commercial building activity in particular,” Burn said.

“With new orders having recovered from the slump in the September quarter, the construction industry is set to close 2021 making a strong contribution to the rebound of the broader economy.”

Leading the way in November was commercial activity with a score of 68.8 – up 6.3 points from October – while engineering fell 10.2 points to grow the second fastest with a score of 66.7.

Housing constructing activity was the only sector to fall into decline with a score of 46.6, down 5.3 points compared to October.

Burn said the steadier growth in November tempered the keen recovery seen in the months prior, but warned the highs may not last for long.

“Across the construction industry, the breakneck pace of expansion seen in October eased to more sustainable levels; employment picked up further; and the in-flow of new orders continued to accelerate at a level that, if maintained, will strain capacity,” Burn said.

“Capacity utilisation recorded a record high in November and constraints to further expansion in the form of difficulties in filling vacant positions and ongoing disruptions to the supply of inputs are leading industry concerns.”

Despite housing being the only decliner in November, HIA economist Tom Devitt said the coming 12 months would be positive for the sector.

“Housing activity swiftly resumed following the end of lockdowns, continuing to sustain elevated levels in November,” Devitt said.

“Now with HomeBuilder clearly in the rear-view mirror, it is a shift in consumer preferences that continues to drive demand for new houses. This will support new house building activity on the ground, and associated employment, throughout 2022.”

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Australian PCI free falls from August lockdowns

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