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Property developers bask in further expansion of construction sector

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It certainly seems like a promising year for property developers and investors in Australia, as the latest dispatch from the Australian Industry Group (Ai Group) indicates the country's construction industry is healthier than ever.

Earlier this month, the Ai Group released the August reading of its Performance of Construction Index (PCI), which it produces in conjunction with the Housing Industry Association (HIA). Developers across the country may want to get their property valuation software at the ready, as the index has recorded a third straight month of expansion.

August's PCI was posted as 55.0 - a healthy level above the 50 point threshold that separates expansion from contraction. Encouragingly, this follows on from two consecutive months of similar expansion in June and July. 

Incredibly, June's PCI of 51.8 marked the first time in 2014 that Australia's construction sector managed to escaped contractionary territory. Judging by the strong growth maintained in the following two months, property developers may feel confident about their chances for the remainder of the year.

In keeping with trends witnessed throughout much of the year, apartment building was revealed to be a major contributor to growth. In fact, it was the best-performing sub-index in August, rising by 13 points to reach 64.9.

As HIA Economist Diwa Hopkins noted, residential and commercial construction also enjoyed fine months.

"The residential construction components of the Australian PCI have been key to the overall index trending higher and ultimately into expansionary territory," she said.

"It's encouraging to now be observing firmer signs of improvement from commercial construction - in terms of both current activity as well as the pipeline of future work. These improved conditions have flowed through to employment, with the construction employment index indicating a second consecutive month of growth."

With powerful property development software now available, developers have all the tools they need to take advantage of a prosperous market.

Date Published: 19 Sep 2014
Category: General News

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