AUSTRALIA’S construction industry has continued to decline due to the volatile apartment sector, according to the Australian PCI Index.
The index fell 4.3 points to 42.6 in June — this 7.2 points below the index reading for May, pointing to a faster rate of contraction in industry activity.
The Ai Group associate director of economics and research Tony Pensabene said the result also reflects the recent up and down nature of the index and, consistent with the rest of the economy, it is demonstrating the trend of getting worse more slowly.
In June, house building activity contracted for a 17th consecutive month down 1.3 points to 44 points but is now 14.3 points above the reading of April 2009, and exhibited the most resilience of all sectors.
The pace of decline in apartment building activity accelerated markedly in June falling by 13.1 points to 35.3. Engineering construction activity also registered a marked contraction declining by 9.6 points to 41.1, following the modest growth outcome of the previous month.
Commercial construction registered its 14th decline in the past 16 months down 7.2 points to 38.4.
“Although the June decline was principally led by the volatile apartment sector in the wake of the recent slump experienced in approvals, the survey also signalled a fall-off in work generated from both engineering and commercial construction projects,” Pensabene said.
HIA senior economist Ben Phillips said the drop in the apartment’s segment will continue to impact heavily on the rental investment market. The consequences will be a continuation of strong rental growth and acute rental shortages.
