Construction in expansion for 5th month

Growth in construction activity has slowed, as the strength in the housing market is offset by weakness in engineering construction.

The Australian Industry Group/Housing Industry Association Performance of Construction Index fell 5.7 points to 53.4 points in October.

But, it was the fifth straight month the index has stayed above the 50 level that separates expansion from contraction.

Ai Group director of public policy Peter Burn said the data reflect the changing nature of the Australian economy, away from one that was driven by mining investment.

"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," he said.

"With official data showing housing loan approvals flat, construction businesses appear to have wound back the exuberance of recent months with only a marginal lift in employment levels in October."

Housing Industry Association chief economist Harley Dale said the housing sector was consolidating after stellar growth earlier in 2014.

"The activity and new orders indices for both detached houses and apartments are consistent with the maintenance of elevated levels of residential building approvals, rather than further growth," he said.

Of the four construction sub-sectors, engineering was the only one to record a fall in activity in the month.

House and apartment building were robust and growth in commercial building activity moderated.

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Construction in expansion for 5th month