A decline in the Performance of Construction Index during July suggests growth in Australia’s construction industry remains negative.
According to Ai Group and the Housing Industry Association, as of July, the index sits at 39.1 – its lowest figure in six years.
The Index balances survey responses from industry figures with a median of 50, which indicates no change, above 50 suggesting growth and below 50, decline. The rate of growth or decline is determined by the distance from 50.
In the last financial year, only 187,515 approvals for new housing construction were made, nearly one-fifth below 2017-18.
Ai Group’s policy head Peter Burn said “conditions look more fragile than they have for some time with new orders dropping further into negative territory driven by particular weakness in the pipelines of new work in the housing and apartment sectors”.
Homebuilding and multi-residential unit construction rates continue on a steady decline, indicating the pace is “moderating,” HIA Economist Tom Devitt said.
Devitt claimed “cuts to personal income tax rates will take time to have an impact [on residential construction] but it provides a sound basis to expect that the decline in activity will slow over the months ahead.”
Commercial construction remained in negative new orders for the twelfth month in a row.
The report indicated “a solid pipeline of public infrastructure works” placed engineering construction in the best position, although the industry’s sub-index remained below 50.
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