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Construction activity declines, despite housing boom

Construction activity declined in July, despite a pick up in house building activity, according to a survey.

The Australian Industry Group-Housing Industry Association performance of construction index (PCI) fell 3.1 index points to 39.5 points in July.

Engineering construction, apartment building and commercial construction firms all reported lower levels of activity in July.

Ai Group associate director of economics and research, Tony Pensabene said the overall recovery in the construction sector was being hampered by “a weak apartment sector, a fragile commercial construction sector and the normal lags in the commencement of major infrastructure projects”.

However he said house building sector’s return to growth was “good news” and that the construction sector should take note.

“The critical priority will be for the other parts of the construction sector to mirror the house building story, and this will require a lift in business confidence and investment.”

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