Australian Industry Group data shows the construction sector has expanded for a third straight month.

The Ai Group’s performance of construction index for October says builders have kept up the pace from September.

The ranking gave the sector a score of 52.1 points, 0.2 points higher than last month, on a gauge that considers anything over 50 points to signal growth.

Ai Group says apartment building activity was the main driver of the improvement.

“The sector’s activity subindex expanded for a fifth consecutive month and at the steepest pace in the 10 years since the start of the survey in September 2005,” Ai Group said.

“However, house building activity weakened in October, returning to negative territory for the first time in five months.”

Commercial construction declined as well, but the analysts say conditions in the sector are approaching to stabilisation, which is set to benefit further from a reported increase in new tender wins.

The index ranked engineering construction as the weakest performing area, but even its rate of decline slowed during the month.

New infrastructure work appears to have softened the impact of a diminishing mining-construction sector, Ai Group added.

“Reports from residential builders were mixed. While respondents to the survey were positive in their assessment of apartment building activity, a softening in housing conditions was apparent with reports of fewer customer inquiries and lower new orders in the month,” Ai Group said.