Australian construction PMI pukes lower

Goodbye Botox Boom:

Construction sectors: Engineering construction (54.0 points trend) was the best performing sector in November, recording its 21st consecutive month of growth on the back of on-going strength in publicly funded investment in large-scale infrastructure projects. At the other end of the scale, apartment building activity (31.0 points trend) contracted for an eighth consecutive month and at its sharpest trend rate in six years while the house building sector (40.1 points trend) fell further into negative territory with its rate of decline also the most marked in six years in trend terms. Commercial construction remained relatively subdued, contracting for a fifth consecutive month (47.0 points trend).

Construction prices and wages: Input price inflation in the Australian PCI® pointed to a continuation of elevated cost pressures in November. The input prices index increased by 0.7 points from November to 73.1 points (seasonally adjusted), indicating that costs in the construction and delivery of building projects lifted slightly during the month. These cost pressures reflect robust demand for construction materials (mainly due to solid infrastructure investment) and elevated energy input costs. Selling prices continued to contract in November, albeit at a slower rate. The selling prices sub-index in the Australian PCI® increased by 2.8 points to 47.1 points in November. This indicates that pressures on businesses in raising prices persists due to a highly competitive tendering environment. The ongoing gap between these price series in the Australian PCI® also demonstrates that profit margins remain tight for many businesses.