This article is from the Australian Property Journal archive
THE Australian Construction Index rose 4.9 points in November to 39.6, however remained below the 50 point level for the 18th month in a row.
The Australian Industry Group and HIA index found whilst new orders were still contracting in November with the sub-index measuring 38.6, this was an improvement of 6.7 points on the previous month.
Activity across the industry remains subdued although the recent interest rate decision was reflected in the 5.3 point lift in house building activity (38.6).
The pace of decline also eased for engineering construction (45.6) with more work flowing from resource-based projects.
In contrast, apartment building (23.4) and commercial construction (28.3) contracted at a faster rate in the month.
Ai Group director public policy Peter Burn said the construction sector remains very uneven with the residential and commercial construction sub-sectors considerably weaker relative to the resources-project linked engineering construction sub-sector.
“Commercial construction continues to contract and businesses completing projects related to the fiscal stimulus package are not finding sufficient private sector work to keep fully occupied. While still far from satisfactory, the sector overall appears to be pulling back from the accelerating pace of decline reached in August and September,” Dr Burn said.
HIA senior economist Andrew Harvey said the index highlights the current fragile state of residential building with activity continuing to contract and looking a long way from an eventual return to growth.
“There’s no hiding from the fact that house building activity has contracted for 18 straight months and apartment building activity has now contracted for 19 straight months.
“When you consider this long-lived decline in residential building activity alongside recent dismal building approvals it is clear that the Federal Government needs to urgently turn its attention to stimulating new home building in this country,” he urged.
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