Construction PMI ekes out expansion

From the AIG:

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The seasonally adjusted Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) increased by 6.2 points to 50.1 points in March. This indicated the slightest of expansions across the construction industry following four months of contracting conditions.

 Australian PCI® data for March revealed a solid improvement in the new orders sub-index which returned to expansion (i.e. above 50 points) for the first time in the five months. Encouragingly, deliveries from suppliers also expanded in March while the activity sub-index contracted at its slowest rate since November 2014.

 The improvement in March was driven by a solid increase in house building activity which expanded after three months of contraction, and at a rate that was the strongest in five months. Apartment building activity continued to strengthen, with growth picking-up to its highest pace in four months.

 In contrast, mining-related engineering construction remained in negative territory declining at a steeper rate in the month. Commercial construction again declined, although its rate of contraction moderated following a marked weakening in February.

 The upturn in the Australian PCI® in March coincided with reports of higher levels of demand, mainly among residential businesses. House and apartment builders noted that customer enquiries had remained firm, with activity also benefitting from continued strong investor activity.

 However, the operating environment remains tough for many businesses with impediments such a lack of public sector building works, tough competition for the available work and diminishing mining related construction cited as the main constraints on activity.

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The biggest mover was new orders, perhaps following the February rate cut. Full report.

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