Apartment construction driving October building growth

Apartment construction driving October building growth
Apartment construction driving October building growth
The three months up to October recorded the fastest pace of growth in apartment construction in ten years, according to the latest construction performance index released by the Housing Industry Association in conjunction with the Ai Group.
 
The Ai Group/HIA Australian Performance of Construction Index found house building activity weakened in October, and fell into the negative for the first time in five months. 
 
Apartment construction driving October building growth

 

HIA economist Harley Dale said the October data reinforces the important role that residential construction is playing in driving broader economic activity. 

"The strong findings for apartments are consistent with the considerable pipeline of activity, while the overall trajectory for detached houses signals healthy construction in 2015/16, albeit off the cyclical peak of last year," he said. 

"That is, however, a sharp monthly decline in the house building sub-index and some reversal will hopefully come through in November. There are signs emerging of a broadening strength to the construction industry – the results for the commercial and engineering construction sectors are encouraging.” 

Ai Group Head of Policy Peter Burn said commercial construction has edged closer to expansion.

"In contrast, house building slipped into negative territory and engineering construction remained in contraction," he said. 

"The higher level of activity in the apartment sub-sector was sufficient to extend the overall construction sector expansion into a third month. 

"Expectations of further growth in the months ahead will be encouraged by the higher levels of new orders recorded for the apartment, engineering and commercial construction sub-sectors. This is a further sign of the long-awaited broadening of the base of economic growth.” 

The report said construction activity sub-index contracted slightly in October (down 1.2 points to 49.5) after two months of expansion, but new orders (up 1.1 points to 53.5) and employment (up 2.3 points to 54.9) both expanded for a third month. Supplier deliveries dipped slightly into negative territory (down 2.5 points to 49.6).

Apartment building activity  increased up 9.2 points to 72.4. House building contracted for the first time in five months, falling sharply from September’s 11-month high (down 9.8 points to 47.0).

Michael Crawford

Michael Crawford

Michael is the real estate reporter for western Sydney and loves writing about homes and the people who live in them. A former production editor and news journalist, he enjoys writing about real-world property purchases as well as aspirational buys and builds. Following a recent move from Sydney’s northern beaches, Michael now actually enjoys commuting.

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