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According to the latest PCI figures, Australia’s construction sector grew at its fastest rate since mid-2016.
According to the latest PCI figures, Australia’s construction sector grew at its fastest rate since mid-2016.
 









New figures show construction sector is ‘bouncing back’

Following four consecutive months of decline, Australia’s construction sector grew at its fastest rate since mid-2016.

According to figures from the Australian Industry Group (Ai Group) and the Housing Industry Association (HIA), deliveries of building materials from suppliers rebounded after six months of decline.

The two industry bodies released the latest Australian Performance of Construction Index (PCI) at the beginning of March. Measuring changes in activity levels across the construction sector each month, the PCI rose to 53.1 in February, up 5.4 points.

As previously reported by Quarry, a reading above 50 points indicates that construction activity is generally expanding, with the distance from 50 indicating the strength of the increase.

Houses, commercial and engineering – construction’s sub-sectors – reported increases, with house-building activity expanding at its highest rate since June 2016. In contrast, apartment building activity fell for the sixth consecutive month.

“The construction sector bounced into expansion in February, backed by gains in commercial and engineering construction,” Ai Group head of policy Peter Burn commented. “The apartment building sub-sector remained in the red, even though levels of activity remain high by historical standards,” he added.

Engineering construction activity increased in February by 11.1 points to 53.9 points. This was in line with higher infrastructure activity softening the impact of mining and heavy industrial investment being wound back.

In line with the improvement in aggregate industry demand, deliveries from suppliers rose for the first time in six months, with the supplier delivery index increasing by 2.9 points to 52.7 points.

In response, HIA chief economist Harley Dale said detached housing would be the ‘gem’ in Australia’s building sectors in the upcoming months.

“For manufacturers, suppliers, sub-contractors, builders and many other market participants, [there is a] relatively strong showing for detached housing,” he said.

“The latest PCI supports our view that new home construction activity will hold up very well in the short term, after which there will be marked decline in medium/high density construction relative to detached housing.”

More reading
Building construction up, engineering down
Construction sector reaches 10-month high
Construction industry slows as residential market cools
 










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Tuesday, 20 August, 2019 3:25pm
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