Australian Construction Grows for First Time this Year as Home Building Lifts the Sector

Australia’s construction industry grew for the first time this year in June, with home building lifting the sector as mining construction dwindles.

The Australian Performance of Construction Index rose 5.1 points to 51.8, above the 50 level separating expansion from contraction, and indicating growth for the first time in six months.

As well as the growth in the housing sector, up 2.2 points to 56.6, engineering construction halted its decline, rising 16.3 points to 51.1 as infrastructure work on the east coasts began. The gains were driven by local council and infrastructure projects

The Australian Industry Group's Director of Public Policy, Peter Burn, said: “The Australian construction sector closed off the financial year on a positive note by lifting back into growth following five slow months.

“The stars aligned for engineering construction with an unexpected lift in activity on the back of local government and infrastructure projects.

“However, new orders in the engineering construction sub-sector continued to fall and, with the mining construction boom now winding down, the outlook for this sub-sector is for ongoing weakness.

“In contrast, and suggesting further rebalancing within the construction sector, new orders grew at a faster pace for both housing and apartment building.”

The expansion of new orders for house and apartment building was a good sign for continued strength in coming months, although the Housing Industry Association said firmer data was needed in commercial building before any recovery in this sector to support housing could be confirmed.

Businesses remained reluctant to take on new staff, with employment remaining weak at 47.4.