Australia construction PCI remains above the 50-point mark, declines on month

Australia’s construction sector remained upbeat during the month of July, although modestly declining from previous levels, considering all the uncertainty present during the month.

Australia’s performance of construction index (PCI), released by the Ai Group in conjunction with the HIA, came in at 51.6, signaling that activity levels expanded modestly over July. Across the four sub-sectors, apartment building contracted for the second time in three months, falling 7.2 points to 48.0.

While a volatile gauge at the best of times, much like Australia’s building approvals report released by the ABS, it now sits well below its 12-month average of 55.5. Elsewhere commercial construction activity also moderated, falling 1.5 points to 51.8, while activity levels across engineering construction sector fell back into negative territory as a slowdown in mining-related work outweighed support from higher non-resources infrastructure work.

"Residential builders cited an easing in new orders and customer enquiries in July, although activity continued to receive a high degree of support from on-going projects while investor activity was seen as remaining steady in the month," said the Ai Group.

Meanwhile, the sub-index on new orders came in at 51.7, down fractionally on the levels seen in June. The employment sub-index also eased, signalling a slower pace of hiring, with the gauge falling 1.7 points to 52.2.