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December, 2017 3:07 PM



Infrastructure, homes boost construction

Infrastructure, homes boost construction

More house building, a fresh high in engineering work, and a surge in commercial work have helped lift overall construction activity, despite fewer apartments.

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By AAP 07.12.2017 09:30 AM

Growth in engineering construction has hit a fresh high in November, helping to bolster overall construction activity despite a continuing decline in apartment building.

The Australian Industry Group and Housing Industry Association Performance of Construction Index (PCI) climbed 4.3 points to 57.5 points in November, staying above the 50-point level indicating expansion for the 10th month in a row.

Ai Group head of policy Peter Burn said the increase in activity came despite the well-established trend decline in apartment building continuing.

"Activity in the construction sector, which has been expanding for most of the year, accelerated further in November as higher activity levels in both engineering construction and house building were backed up by a surge in commercial construction," he said.

Engineering construction remained the strongest performing area of construction activity, lifting 3.2 points to 64.1 points - an 11-and-a-half-year high - on the back of rising momentum in the roll-out of large-scale infrastructure projects.

House building activity also strengthened, due to continuing firm demand and support from a solid backlog of work, and was up 8.2 points to 61.3.

But apartment building activity contracted for a fourth consecutive month, but did so at a slower rate.

The rate of expansion in commercial construction lifted to its second highest level in almost three-an-a-half years, up 9.7 points to 59.8, amid an increase in the number of projects entering the work pipeline.

Overall activity was also helped by expansions in new orders, deliveries from suppliers and employment.

HIA senior economist Shane Garrett said the short-term outlook for new home building remained strong, with interest rates staying at a record low for longer than expected.

"Low interest rates and unprecedented migration from overseas are the two most important reasons why new home building reached the highest level on record last year," Mr Garrett said.

"Looking further ahead, other factors - including regulatory restrictions - will force new home building to move lower over the next couple of years."

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