Renewed growth in residential building has lifted national construction to its strongest point in almost three and a half years, according to a report released this week by the Australian Industry Group (AIG).
Despite the encouraging 3.9 points lift to 47.6, the AIG/HIA Australian Performance of Construction Index (Australian PCI®) remained shy of the critical 50 points break-even mark.
In September, growth in new orders drove an expansion in activity for the first time since April 2010. The activity sub-index was 8.0 points higher than the previous month and at 51.9 ends forty consecutive months of decline.
Australian Industry Group Chief Economist Julie Toth said that the construction sector is closer to stabilisation than at any time since mid-2010.
“The housing and apartment sectors are driving the industry's improved performance on the back of lower interest rates and a lift in buyer sentiment”, Ms Toth said.
“House building recorded its strongest reading since May 2010 while apartment construction ended 40 months of declining activity.
“With new orders increasing for the first time since May 2010, there are grounds for cautious optimism that the current improving trend can be sustained in coming months," she concluded.