Construction growth hits nine year high

by Julia Corderoy08 Oct 2014
Construction growth has surged to a new high in September, with home and apartment building leading the way.  

According to the Australian Industry Group/Housing Industry Association Performance of Construction Index, construction increased by 4.1 points to 59.1 in September, signalling the industry's strongest pace of expansion in the nine years since the survey's inception.

The upturn in construction industry conditions reflected expanding activity across three of the four sub-sectors, but the growth was led by house building (61.7 points) and apartment building (60.5 points).

Harley Dale, HIA chief economist says this is important news for the economy, especially surrounding the uncertainty of the housing market and the RBA contemplating tightening housing lending standards.

"The latest [data] is among a string of indicators signalling that the strong performance of the new residential construction sector should continue throughout 2014/15. The commercial construction sector finally appears to be following the lead of new residential construction, which is another pleasing outcome," he said. 

"It will be important for the broader economy that evidence of strong performance in residential and improving performance in commercial construction presents itself throughout 2014 and into next year. The current elevated focus and uncertainty around the potential implementation of restrictive lending practices, and sweeping generalisations on this subject, are not helpful to that evidence emerging."