Residential Boom Continues To Strengthen The Construction Industry


Perhaps you have noticed early signs of the slow growth in the housing boom. Contrary to this slow down, house construction and apartment construction continue to surge which offsets a sharp mining building decline. Recent building approval figures will show a peak in the new home construction looming, but the leveling off in the various building plans has not yet been fed to construction activity.

Reports show that the Performance of Construction Index for Housing Industry Association and the Australian Industry Group last month came in just at 51.9 which is slightly lower from the previous month’s figure. However, this number is still significantly above the 50 point level which indicated expansion. The fall in number from the previous month was driven by a 9.3 point slump in the category of engineering. This is a category which is dominated by resource projects and lately there has been a sharp contraction.

The category of commercial construction also fell by about 6.5 points last September and is currently in a negative territory at 48.1. In contrast, the sector of housing building rose by about 2.4 points to at least 56. This indicates a very solid expansion in the housing sector. Apartment construction meanwhile was even much stronger and registered a 4.5 point increase to at least 63.2. This highlights a unit building boom which is by far offsetting the decline in the mining bust. Residential construction on the other hand remains to be the cornerstone of the construction industry and will continue to retain its role at least during the first six months of next year.

Economists said that the commercial construction sector is continuously showing very positive signs. There are likewise tentative signs of improvements which emerge from the commercial subsector of the construction industry. However, these are yet to be sustained in that the rise in the construction activity index last month took a significant tumble.

Nevertheless, new orders coming from this particular segment of the market continue to increase which suggests that a recovery can soon happen in the New Year. This news also has positive effect to Perth renovation builders.

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