Constrution PMI bounces

From the AIG:

 The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) increased by 5.6 points to 50.8 points in April. This indicated a slight expansion across the construction industry following four months of contracting conditions.

 Australian PCI® data for April revealed a solid improvement in the activity sub-index which returned to expansion (i.e. above 50 points) for the first time in seven months. In addition, businesses lifted their workforce capacity, with employment recovering strongly after two months of decline.

 New orders continued to contract in April, although the rate of decline was marginal, and the slowest in five months.

 Across the four sub-sectors in the Australian PCI®, engineering construction returned to growth, following a 21-month period of contraction. In contrast, commercial construction activity weakened, falling back into negative territory after growth outcomes in the previous two months.

 House building activity contracted for a third consecutive month (albeit at a slower rate) while conditions in the apartment sector were weaker with activity recording a slight overall contraction in the month.

 House builders mainly commented on slower market conditions due to fewer customer enquiries, weaker home buyer sentiment and lower new orders. A softening in apartment building conditions was linked to over-supplied apartment markets starting to take hold, and tighter lending criteria for investors. The lift in engineering construction activity was generally attributed to an improving flow of infrastructure work, particularly transport projects in NSW.

 Highlighting the on-going toughness of operating conditions, a number of respondents indicated a continuation of intense pricing competition and tight margins.

Full report.