Australia’s construction sector expanded last month

It’s been a long time coming, but Australia’s construction sector recorded growth for the first time in five months, especially for non-residential projects.
February was a triumphant month for the Australian construction industry, with the sector expanding for the first time in five months.
Commercial and engineering construction projects have been leading the way, marking the strongest improvement since the middle of last year.
This boom is reflected by the Performance of Construction Index (PCI), which jumped to 53.1 points last month – indicating expansion, rather than contraction. Peak body Ai Group measures changes in activity levels across Australia’s construction sector each month, and levels above 50 provide good reason for optimism.
Levels contracted across Australia in late 2016, so the surge in February came as a refreshing change.
This is largely due to increased demand for infrastructure projects, especially road and rail in the eastern states.
The positive flow on effects have trickled down into the workforce, with employment rising for the first time in four months.
“Conditions in February were also supported by an increase in deliveries from suppliers and an upturn in the new orders sub-index which returned to growth after six months of contraction,” according to the Ai Group.
Recent positive developments are supported by figures from the ABS, which point to a GDP growth of 1.1 per cent during the December quarter of 2016.
The non-residential construction sector has come out on top, having ended 2016 on a high note, with investment growing by 5.7 per cent to 23.7 billion.
Looking forward, Matthew Pollock from Master Builders Australia predicts that upcoming major transport and infrastructure projects will encourage further growth in the sector, with the value of work projected to spike in 2017-18 to over $33 billion dollars.
“The completion of around $50 billion of major LNG projects slated for the next six months is likely to continue to drag on activity in the short term, but more sustained growth is expected to return looking past the next six months,” Mr Pollock said.
Our hope is that investment in non-residential construction projects will continue to soar throughout the year, translating to more jobs and a healthier economy.