Demand for housing has pushed up construction activity, ending 18 consecutive months of decline.
The Australian Industry Group’s Housing Industry Association Performance of Construction Index surged 8.4 points in September to 50.8, edging marginally above the level of 50 that separates expansion from contraction, for the first time since February 2008.
The return to growth has been attributed to the house building sector, which jumped 11.9 points to 64.4 as contracts signed by first home buyers now start translating into building activity.
According to Housing Industry Association senior economist, Ben Phillips, the effects of low interest rates and the Federal Government’s first-home buyer grant should help support home construction for up to a year.
“It’s certainly true to say that in 12 months’ time or so you will see a drop off in the first-home buyer end of the market, so what’s actually happening on the ground,” he told ABC News.