Australian Performance of Construction Index shows 0.8-point improvement in November to 55.2, the second consecutive month of gains, led by boost in new orders, deliveries, continuing strength in overall activity
December 5, 2013
– The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) for November expanded for the second consecutive month with an increase of 0.8 points to 55.2 (readings above 50 indicate an expansion in activity).
A boost in new orders (58.5) and deliveries (57.9) as well as continuing strength in overall activity (54.6) was behind the improved November reading. While house building and apartments lost some ground in the month, all of the major sub-sectors remained in growth territory.
Australian Industry Group Director, Public Policy, Peter Burn, said: “The construction sector extended its expansion in November adding further to the accumulation of momentum evident in recent months. The fact that growth was reported in each of the four sub-sectors is particularly encouraging and adds to the signs that the long-awaited re-balancing of the domestic economy may be getting underway on the back of low interest rates and a lift in business and household confidence. However, given the extent of the slump in residential and commercial construction over more than three years, the expansions recorded in October and November are from a low base and we are still some months from a convincing recovery,” Dr Burn said.
Housing Industry Association Chief Economist, Harley Dale, said: "Following the charge into expansionary territory in October it was important to see a further 50+ result in November- it's great to see that outcome transpire. There appears to be little else in the way of upward momentum in private domestic demand at present, but the Australian PCI® results for house building and apartments signal further short term growth in the dwelling construction recovery. To sustain that recovery and return new home building to strong levels requires closer attention to policy reform than is currently evident. Consistent reference in the Australian PCI® survey to tight credit conditions is one example of an avoidable roadblock to a construction-led recovery in the Australian economy," Dr Dale said.
Australian PCI® Key Findings for November: