Australia Construction Sector Swings To Expansion: AiG

The construction sector in Australia expanded in March,driven by a solid increase in house building activity, the latest survey from the Australian Industry Group and the Housing Industry Association showed Thursday.

The Ai Group/HIA Australian Performance of Construction Index,or PMI, climbed by 6.2 points to 50.1 in March from 43.9 in the previous month.

A reading above 50 indicates expansion in the sector, while any score below 50 suggests contraction in the sector.

The improvement in March was largely driven by a solid increase in house building activity, with the corresponding index rising by 10.4 points to 55.8.It was the strongest rate since October 2014.

Apartment building activity also strengthened in March while mining related engineering construction weakened further and commercial construction again declined.

New orders increased solidly by 12.1 points to 50.8 in March. It was the first expansion since October 2014. Employment level in the construction sector stabilized, with the sub-index rising to 50.0 in March from 47.6 in February.

"It is therefore important that new home building activity does not end up being stifled by the unhelpful policy settings in place, both for the sake of economic growth in the short term and Australia's housing requirements over the longer term," HIA Senior Economist, Shane Garrett, said.

"In this regard, the RBA's decision not to reduce interest rates this week adds to uncertainty across the economy and represents a lost opportunity."

by RTT Staff Writer

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Australia Construction Sector Swings To Expansion: AiG