Construction PMI tanks

Oh dear:

The national construction industry moved back into negative territory in November, with the seasonally adjusted Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) dropping 8.0 points to 45.4 points in the month.

 The fall in the Australian PCI® in November to a level below the critical 50 points threshold (that separates expansion from contraction), signalled the industry’s first decline since May 2014.

 This significant loss of momentum was driven by a renewed decline in activity and new orders in November which contributed to a steeper fall in employment and a sharp slowdown in deliveries from suppliers.

 All four sub-sectors in the Australian PCI® experienced weaker activity in November. Despite continued expansion in house building, its rate of increase moderated to its slowest pace since March 2014. Apartment building activity also recorded an easing in growth in response to a second consecutive month of declining new orders. Engineering construction exhibited the weakest conditions, with activity declining at a steeper pace in November. Commercial construction also contracted following four consecutive months of growth.

 Survey respondents attributed this month’s deterioration in conditions to a decline in new tendering opportunities, slow public building activity, project delays and a further winding back in mining related construction work.

 House builders noted a reduction in customer enquiries and sales in November amid competitive market conditions.

That report stinks. Here’s the new orders with a universal sag:

And employment reacted fast:

Given dwelling construction is pretty much all that’s moving in this economy that is not good news. A spooked consumer?

Full report here.