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The AiG construction PMI for March is out (the PCI) and the news is poor. Following February’s good gains, the index has collapsed again, down 6.6 points to a thoroughly recessionary 39:
The weakness is broad based but most obvious in engineering construction:
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Forward looking indicators like new orders and employment also fell across categories:
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In fact, the internals look pretty shabby all around:
The one good thing is that housing construction has not broken its nascent uptrend. But on the whole, banking on construction to carry Australia through the end of the mining boom, after 175bps in rate cuts over 18 months, ain’t shaping up too well.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.