The latest figures released by the Housing Industry Association (HIA) and Australian Industry Group (AI Group) show that the rate of construction in the housing industry has begun to soften, posting 35.8, up 4.9 points, where any recording below 50 is a contraction and the distance from 50 indicates the rate of contraction.

 

The Australian Performance of Construction Index (Australian PCI) report found a less pronounced decline in new orders (36.8) and supplier deliveries (41.5) helped give the overall index a boost.

 

" While the construction industry and particularly the commercial and residential construction sub-sectors are still contracting, the Australian PCI® took a turn for the better in October with a cooling in the pace of decline," Australian Industry Group Director Public Policy, Dr. Peter Burn, said.

 

Despite the easing of the contraction, the HIA remained pessemistic over the current state of play in the construction sector.

 

"A protracted period of contraction in the Australian PCI®, which in October extended to 29 consecutive months, represents a blight on Australia's economic performance and has made it difficult to find any glimmer of hope for the construction industry," HIA's Chief Economist Harley Dale said.

 

Australian PCI® Key Findings for October:

  • The latest Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®)registered a lift of 4.9 points to 35.8 in October (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
  • October marked the 29th consecutive month the Australian PCI® has contracted.
  • House building activity was up 12.5 points to 41.0 in October; commercial construction also contracted at a slower rate - 37.4, apartment building was 27.6 and the engineering construction sub-index increased by 2.4 points to 35.1.
  • New orders declined in October for the 29th consecutive month - 36.8.
  • Tight credit conditions, project delays and uncertainty about the economic outlook affected activity in the month.
  • Growth in wages continued in October, albeit at a slower rate than in the previous month, with the sub-index falling by 3.3 points to 54.7.

 

Download the full October Australian PCI®