Home building drives construction into growth for first time in 2014

by AB07 Jul 2014
Improvements in home building have helped to drive the national construction sector into growth territory for the first time this year.

The Australiam Industry Group Performance of Construction Index was up 5.1 points to 51.8 in June. Any reading above 50 indicates an expansion in activity.

Home building grew 2.2 points to 56.6, while engineering construction rose to positive territory, up 16.3 points to 51.1. HIA economist Diwa Hopkins said the rise in housing construction represented the 10th straight month of growth for the sector.

The Australian construction sector closed off the financial year on a positive note by lifting back into growth following five slow months. The housing sub-sector went from strength to strength marking a tenth straight month of expansion with an accelerated pace of increase in June. The stars aligned for engineering construction with an unexpected lift in activity on the back of local government and infrastructure projects. However, new orders in the engineering construction sub-sector continued to fall and, with the mining construction boom now winding down, the outlook for this sub-sector is for ongoing weakness. In contrast, and suggesting further rebalancing within the construction sector, new orders grew at a faster pace for both housing and apartment building," Australian Industry Group director of public policy Peter Burn said.