PCI demolishes RBA construction hopes

Advertisement

The AiG Performance of Construction Index (PCI) is out for April and, such as it is, is disastrous for the RBA and Treasury project of boosting housing construction to replace mining investment.

I don’t entirely trust the AiG PMI series. But it hard to ignore falls like this:

PCI

All of this year’s recovery is gone. Moreover, the internals are worse for the rebalancing project.

Advertisement

Activity in houses tanked:

activty

New orders persisted in a slowly rising trend:

jdsbfvkljsb

But new orders for houses tanked:

Advertisement
s;dvbso;ib

Meanwhile, the most important dimension of rebalancing, jobs, collapsed to its lowest level in the cycle:

lsabfasw2

The full lineup is sobering:

Advertisement
pci2

What can I say? All three AiG PMIs tanked in April. They are second order indicators and the consumer is spending OK in stores but it pretty clearly isn’t translating into business investment.

Sorry RBA and Treasury, you’ve have stuffed it up.

Final Pci April Report

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.