Australia – AIG Performance of Construction index for November, HUGE fall into contraction again, comes in at 45.4

  • Contracted for the first time since May 2014
  • The loss of momentum was driven by a decline in activity (down 6.7 points to 47.4) and new orders (down 8.5 points to 44.0) across all four construction industry sub-sectors in November.
  • This contributed to a steeper fall in construction employment (down 8.5 points to 42.0) and a sharp deceleration in deliveries from suppliers (down 8.9 points to 50.1, indicating stability in deliveries).

Ai Group Chief Economist, Julie Toth:

  • “Survey respondents attributed this month’s deterioration in conditions to a decline in new tendering opportunities, slow public building activity, project delays and a further decline in new mining-related construction projects.
  • While one month’s data does not necessarily indicate a new trend, this slower pace of building activity was also reflected in slightly lower building approvals for detached houses in October and September (released this week) and in the latest GDP estimates for Q3 for Australia.
  • These data really underscore the fragile and sporadic nature of the current recovery in residential housing activity, especially as we move into the end of year shut-down period for much of the industry.”

HIA Chief Economist, Harley Dale:

  • “The weakening in the Australian PCI in November was driven by a variety of components, of which a broad-based contraction in new orders is the most concerning.
  • Perceptions regarding Australia’s short-term economic outlook have dampened recently and today’s result will hardly buoy the prevailing mood.
  • The rate of expansion in detached house and apartment building activity slowed in November, but at least both these sub-indices remained in the black.
  • It will be disappointing if the rate of expansion in these Australian PCI® components fails to re-accelerate in coming months given new home construction is currently the key domestic sector with promise of healthy activity in 2015.”
aig construction pmi

Earlier this week we got the other two Aussie PMIs: