The construction sector is struggling to cope with continued poor demand and subdued workloads, according to the Australian Industry Group’s (AI Group) Australian Performance of Construction Index.

 

Published in conjunction with the Housing Industry Association (HIA), the index was 2.2 points weaker, finishing 32.6 points for the month (readings below 50 indicate a contraction in the industry with the distance from 50 indicative of the strength of the decline).

 

July marked the 26th straight month that the sector has been in the red. A positive development was the marked slowing in the rate of decline in apartment construction activity consistent with the recent lift in multi-unit approvals. However, commercial construction continued to exhibit substantial weakness, while the lower interest rate environment has yet to translate into an improvement in house building activity.

 

"A slower rate of contraction in apartment building in July is a positive sign, but the reality is that it still means yet another month in which activity has declined,” HIA’s Senior Economist Andrew Harvey said.

 

Australian PCI® Key Findings for July:

  • The Australian Industry Group Australian Performance of Construction Index (Australian PCI®), in conjunction with the Housing Industry Association was 32.6 in July - 2.2 points weaker than the previous month (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
  • July's reading is the lowest since last September. The index has now been contracting for more than two years.
  • All four sub-sectors remained in the red in July: House building (28.0), commercial construction (26.1), apartment building (32.9), and engineering construction (39.5).
  • Apartment building recorded a marked reduction in contraction in July - reflecting a boost in multi-unit approvals.
  • The new-orders sub-index was broadly unchanged - up slightly to 33.9.
  • Employment contracted further in July.

 

Download the full July 2012 Australian PCI®