The Australian Industry Group (AI Group) has released its Australian Industry Group Performance of Construction Index, recording a slump in construction during April.

 

Released in conjunction with the Housing Industry Association, the index found that the construction sector has fallen 1.3 points weaker, ending at 34.9 in April.

 

The index found that apartment building was the weakest of the four sub-sectors, with the index recording a slump fall to 22.9 basis points. The index of house building (33.3) and commercial construction (35.2) activity also remained well below the expansion-contraction threshold of 50.

 

"The fall in construction activity in April is further evidence of the widespread nature of the current slowdown in the broader economy. The ongoing weakness in the residential and commercial construction sub-sectors was exacerbated by the slowing in engineering construction activity that has now been in train since the start of the year. Last week's reduction in interest rates will help counter the existing headwinds while the construction industry will have a close eye on tomorrow's Budget and the impacts it may have on business, household and public sector demand over the year ahead," Australian Industry Group Director Public Policy, Peter Burn, said.

  

The key findings for the month are:

  • The national construction sector contracted again in April with particular weakness in apartment building, housing and commercial construction.
  • The latest Australian Industry Group Australian Performance of Construction Index (Australian PCI®) in conjunction with the Housing Industry Association, dropped 1.3 points to 34.9 in April (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
  • The Australian PCI® has now been in negative territory for almost two years.
  • While resource-related projects are giving some support to the engineering construction sector, weak demand and difficulties securing funding for work continue to hamper the apartment building (22.9), house building (33.3) and commercial construction (35.2) sub-sectors.
  • New orders sub-index contracted for the 23rd straight month in April - recording 32.3.
  • Employment continued to contract at a broadly unchanged rate in April (39.6).