From the AIG:
The national construction industry continued to expand in November, although the pace of growth was marginal and the slowest since overall conditions returned to growth in August.
§ The seasonally adjusted Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) fell by 1.4 points to 50.7 points in November (readings above 50.0 points indicate expansion).
§ Across the four sub-sectors in the Australian PCI® , apartment building activity expanded solidly and at a rate that was only slightly below October’s 10-
year high level. However, house building remained in negative territory with activity declining for a second consecutive month.
§ Commercial construction declined at a steeper rate after showing encouraging signs of moving close to stabilisation in recent months. Engineering construction continued to contract, although its rate of decline moderated for a second consecutive month. This was consistent with reports from some businesses that the uptake of new infrastructure work was helping to soften the impact of a diminishing pipeline of mining-related projects.
§ Across the construction industry, new orders slipped slightly into negative
territory (after growth in the previous three months) while the activity sub-index registered a second month of mild contraction. More positively, deliveries from suppliers increased in November while employment expanded for a fourth consecutive month.
§ Respondents to the Australian PCI® were generally positive in their assessment of apartment conditions indicating that project work had held firm in November. However, a slower housing market was evident with reports of fewer customer enquiries, lower new orders and reduced sales. This was mainly linked to the negative impact on home buyer sentiment from recent rises in bank mortgage rates and tighter lending criteria for investors.
§ A highly competitive pricing environment and continued declines in mining-related projects were the main negatives on a broader industry front.
That new orders roll over is not terribly encouraging. Employment is still holding up but it won’t as that persists. Full report.
