Australia's construction sector just slowed suddenly as new orders dry up

Australia’s construction sector lost a bit of momentum in December with activity levels improving at the slowest pace since April 2017, according to data from the Australian Industry Group (Ai Group).

The group’s Performance of Construction Index (PCI) — a measure of activity levels across Australia’s construction sector — fell 4.7 points to 52.8 points last month in seasonally adjusted terms, continuing to decelerate from the record-high level of 60.5 points struck in July 2017.

The PCI measures perceived changes in activity levels across Australia’s construction sector from one month to the next. Anything above 50 signals that activity levels are improving while a reading below suggests they’re deteriorating. The distance away from 50 indicates how quickly activity levels are expanding or contracting.

So at 52.8, activity levels improved at the slowest level in over six months in December. While seemingly a disappointing result, it must be remembered that activity levels have now improved in each of the past 11 months.

According to the Ai Group, the moderation was led by a slowdown in engineering and housing construction, managing to offset an improvement in the apartment sector.

“Across industry sub-sectors, engineering construction and house building remained the strongest performing areas of construction activity in December. However, the pace of activity growth in both sectors was well down on the solid increases recorded in November,” it said. Read more

David Scutt - Business Insider Australia - 8 Jan 2018

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