Construction PMI slides on

The Australian Performance of Construction Index (Australian PCI®) fell marginally by 0.2 points to 46.1 points in February:

 It is the third consecutive month that the Australian PCI® has been below the critical 50 points level that separates expansion from contraction. This follows the industry’s return to growth during the four months to November 2015.

 Across the four sub-sectors in the Australian PCI® , house building activity contracted in February for the first time in three months to be at its lowest level since the start of 2015. The volatile apartment building sector experienced a solid upturn in activity, offsetting the downturn in conditions recorded in January.

 Commercial construction also showed strong improvement in February, expanding for the first time in six months. Engineering construction continued to contract, although its rate of decline was the slowest in nine months.

 For the construction industry as a whole, new orders recorded a steeper decline in February while employment turned down following six months of growth.

 The continued decline in the Australian PCI® coincided with reports of a lower uptake of new business and strong competition for the available work. The on-going winding back in miningrelated construction work and subdued investment among private sector clients were other major factors cited as inhibiting activity.

 A softer housing market was evident in reports of fewer customer enquiries and lower new orders in February. Land supply bottlenecks, planning delays and tighter lending conditions for investors were other factors reported as constraining activity in the housing sector.

Importantly, the employment sub index fell more sharply though it’s uptrend is still intact:

Full report.