Construction activity expands for third month
The Australian Industry Group/Housing Industry Association Performance of Construction Index dropped 2.6 points to 53.2 in May. It was, however, the third consecutive month the index was above the 50-point level that separates expansion from contraction.
The Australian Industry Group said house building experienced the strongest conditions with a lift in new orders and increased investor activity.
“This was in stark contrast to the apartment building sub-sector which recorded a sharp decline in May with the sub-sector index down 16.8 points,” the Australian Industry Group said in a statement released today.
Australian Industry Group director Public Policy, Dr Peter Burn, said the increased pace of input deliveries and the growth of employment suggest that businesses are taking a more positive near-term outlook, however added there is some caution in the data.
"The volatile apartment sub-sector underperformed in May and there is a continuation of the weakness of new orders in this area evident since January,” Dr Burn said.
"Activity in apartment and engineering construction slumped in May and the pace of growth in commercial construction activity that we saw in April was not maintained."
Housing Industry Association senior economist, Ben Phillips, said the industry remains concerned about a likely downturn once government stimulus has run its course.
"The apartment segment continues to underperform highlighting the fragile nature of this credit constrained market," Mr Phillips said.
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