Home building, including that of city apartments, led an expansion in construction activity in February.

The Ai Group and Housing Industry Association Performance of Construction Index (PCI) rose by 1.7 points to 56.0 points – above the 50-point mark separating expansion from contraction – with house building’s 9.8-point increase to 61.8 making it the stand out performer.

Apartment building rising a robust 6.2 points to 56.9 after broadly stable conditions over the previous two months.

Ai Group principal economist Tim Reardon said pent-up demand for new housing is absorbing record levels of new dwellings and that a new phase of apartment construction is getting underway.

“The ongoing boom in apartment construction in metro areas, combined with investment in infrastructure projects, is ensuring strong conditions across the sector,” Mr Reardon said.

Engineering construction expanded by one point to 54.5 points, while commercial construction recorded a 1.1-point pullback in the pace of activity but was still expanding at 57.8 points.