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7 Mar 2014
Australian construction activity at 6-month low
FXStreet (Bali) - The seasonally adjusted Australian Industry Group/ Housing Industry Association Australian Performance of Construction Index came at 44.2 points in February after a 4 points drop, posting a six month low.
Key findings
The national construction industry contracted at a steeper rate in February as activity returned to negative territory for the first time in five months, after a sharper fall in new orders. Reflecting this deterioration, both employment and deliveries from suppliers continued to decline.
Across the construction sub-sectors, house building activity showed continued growth in February, although its rate of expansion moderated to the slowest pace in the past six months. A return to growth was evident in commercial construction, which helped to soften the overall decline in construction activity. This sector’s rate of expansion picked up to its fastest rate in almost four years. Weighing heavily on the headline Australian PCI® however, engineering construction activity turned down sharply in February, to be at its most subdued level in the past eight months. Apartment construction also contracted for a second consecutive month, albeit at a slightly slower pace than in January.
This latest set-back in industry conditions coincided with reports of fewer new contracts and project completions, most notably in the engineering construction sector. Tight credit conditions and a lack of public sector tenders were other major factors generally cited as inhibiting activity. House builders pointed to a reduction in new orders and fewer customer inquiries, although investor activity was seen as remaining resilient in the house building sector.
Key findings
The national construction industry contracted at a steeper rate in February as activity returned to negative territory for the first time in five months, after a sharper fall in new orders. Reflecting this deterioration, both employment and deliveries from suppliers continued to decline.
Across the construction sub-sectors, house building activity showed continued growth in February, although its rate of expansion moderated to the slowest pace in the past six months. A return to growth was evident in commercial construction, which helped to soften the overall decline in construction activity. This sector’s rate of expansion picked up to its fastest rate in almost four years. Weighing heavily on the headline Australian PCI® however, engineering construction activity turned down sharply in February, to be at its most subdued level in the past eight months. Apartment construction also contracted for a second consecutive month, albeit at a slightly slower pace than in January.
This latest set-back in industry conditions coincided with reports of fewer new contracts and project completions, most notably in the engineering construction sector. Tight credit conditions and a lack of public sector tenders were other major factors generally cited as inhibiting activity. House builders pointed to a reduction in new orders and fewer customer inquiries, although investor activity was seen as remaining resilient in the house building sector.