Construction Activity Slips to 13-month Low

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Friday, April 8th, 2016
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Construction activity has slipped to a 13 month low on the back of weakness in home building and declining engineering work.

The Performance of Construction Index slumped 0.9 points to 45.2 in March, remaining below the 50-point level separating expansion from contraction.

Ai Group head of policy Peter Burn said the fourth consecutive monthly decline of the index was driven by weakness in home building and engineering construction overwhelming small advances in the apartment and commercial building sub-sectors.

He also warned that there was no indication of any potential turnaround in the near future.

“With new orders across the sector also falling, the immediate outlook for construction is for further contraction,” Mr Burn said in a statement.

Housing Industry Association economist Geordan Murray said other subsectors sectors were struggling to fill the void left by the decline in engineering construction associated with mining.

He said that was a big concern as the contraction in mining-related building work still had some way to go.

“It is unlikely that a pick-up in conditions in other sectors will fully offset the contraction in mining investment over the next few years,” he said.

“But we need to give non-resource businesses the best possible chance. Bolstering business confidence is the key.”

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