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Australia's construction sector still strong despite quiet October

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Australia's construction industry may have eased slightly from the roaring success seen in recent months, but it's a sector still very much in healthy expansion, according to a new report.

The Australian Industry Group (Ai Group) and the Housing Industry Association (HIA) recently released the October edition of its joint Performance of Construction Index (PCI). The latest gauge of Australia's construction sector shows that, after several consecutive months of growth, the industry took a slight hit last month with the index dropping 5.7 points.

This pulls the index sharply back down from the 59.1 - the record high - reported in September.

However, that doesn't appear to have translated to any significant damage for the industry. In fact, with October's PCI at 53.4, it signals the fifth consecutive month that the construction sector has been in expansionary territory. (An index above 50 marks a state of expansion, while anything below 50 signals contraction.)

Further, there were still signs of encouragement seen across the industry last month. For instance, the residential sub-sector once again stood out as a top performer, with apartment building and house building both strong at 60.4 points and 57.3 respectively.

"With further growth in October, residential and commercial construction continued to lead the rebalancing of the economy away from the emphasis on mining investment that has been such a feature of domestic economic activity in recent years," explained Peter Burn, director of public policy at the Ai Group.

HIA Chief Economist Harley Dale also found plenty of signs of optimism in October's result.

"While the rate of expansion in the Australian PCI slowed in October 2014, this latest update is still a healthy one for Australia's construction industry," he noted.

"Three of the four construction sectors ... registered expansionary readings. With a general economic discourse seemingly focussed on negative news, recent PCI results remain a breath of fresh air."

With Australia's construction scene still incredibly bright, property developers will need no further encouragement to get involved over the remainder of this year and beyond.

Date Published: 13 Nov 2014
Category: General News

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