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Australia's construction index slows down in Oct

FXStreet (Bali) - Australia AiG Performance of Construction Index fell from previous 59.1 to 53.4 in October, signaling a moderation in the industry’s rate of growth, notes AiG.

Key findings

The national construction industry expanded for a fifth consecutive month in October, with the seasonally adjusted Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) falling 5.7 points to 53.4 points in October.

Although the Australian PCI® remained above the critical 50 points level that separates expansion from contraction, it signalled a moderation in the industry’s rate of growth, compared to September’s record-high reading of 59.1 points.

The slower pace of growth was apparent in activity, new orders and deliveries from suppliers in October. This led to a marked easing in employment growth during the month.

Across the major industry sectors, apartment building activity continued to expand solidly and at a rate that was broadly unchanged from the previous month. This is despite a weakening in new orders for apartments. Continued strength was also evident in the house building sector, although its growth moderated. Commercial construction activity also grew at a slower rate in October, while engineering construction activity contracted for a fourth consecutive month.

Survey participants said that the slower pace of growth was linked to an easing in new orders and a corresponding reduction in tendering opportunities during the month. Nevertheless, house builders were generally positive in their assessment of business conditions.

The main factors cited as weighing on activity this month were project completions, sluggish public sector activity and a further winding back in mining related construction work.

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