Apartment construction withstands severe industry wide lockdown contraction

The national construction index contracted severely in August, according to the Australian Industry Group/Housing Industry Association.

The indexes for activity, new orders and supplier deliveries "dropped steeply into contraction" in August, in response to lockdown restrictions in the construction sector in Victoria and NSW, and state border closures.

The biggest drops were in the housing (down 14.4 points to 36.4) and commercial construction (down 11.6 points to 31.3) activity indexes.

The apartment building activity index rose by 13.3 points to 32.1 – but was described as "still far from its expansionary state in June."

New orders fell sharply in August indicating serious contraction as customers showed less interest in joining waitlists for supplies. 

Builders nationwide continue to report very high prices from suppliers and importers, with more builders saying they need to pass on these cost increases to their customers.

The employment index dipped just below 50 points in August (down 11.8 points to 49.0), indicating a pause in the jobs recovery underway earlier in 2021.