AIG Performance of Construction index for July, up 0.8 points to 52.6, an 8-month high
From the report … Key Findings for July:
- grew for the second consecutive month in July – up 0.8 points to 52.6
- Again in expansion
- Construction activity grew 2.7 points to 55.8 in July
- June’s strong boost in the new orders sub-index was consolidated, if falling 1.8 points to 50.8
- Across the sub-sectors: growth was recorded in house building (53.2), apartments (51.9) and commercial construction, which hit a 6½-year high (up 11.4 points to 61.2). But the other sub-sector, engineering construction fell 3.9 points into negative territory at 47.2.
- Construction employment expanded for the first time in eight months, rising 3.9 points to 51.3.
- Selling prices were 3.4 points higher than June at 54.0, but input prices remained strong at 65.7, despite an 8.0-point drop.
Australian Industry Group Director – Public Policy, Dr. Peter Burn, said:
- “The residential and commercial construction sub-sectors are building a head of steam with a welcome strengthening in activity, an upturn in employment, further growth in new orders and more attractive selling prices.
- In July, momentum in these sub-sectors ensured the overall construction sector remained in positive territory despite the ongoing slow-down in engineering construction as investment in mining-related projects fades.
- While house building has been strong for some time and apartment building is at healthy levels, the broadening of growth to include commercial construction is a welcome addition to the mix.
- With fewer resources committed to expanding the mining sector, there is plenty of engineering construction capacity becoming available to accommodate a lift in infrastructure investment”
Housing Industry Association Chief Economist, Dr. Harley Dale, said:
- “A second consecutive expansion in the Australian PCI in July, driven by three of the four sub-sectors, is a tick in the box for the Australian economy as well as the construction industry itself.
- Labour market outcomes as well as economic growth will be assisted in 2014/15 by Australia’s construction industry, led by what is already a strong recovery in new home building activity.
- The Australian PCI activity and new orders sub-indices for houses and apartments are providing a further signal that the building approvals cycle has peaked, within which approvals should remain at historically elevated levels for a time yet.
- In terms of actual construction activity, a more concerted focus on housing policy reform would greatly assist the prospect of extending the current up-cycle beyond this year”
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AUD little changed on the release, we’re waiting on the employment data later
