MNI 5 Things:Australia Construction Signals Capacity Pressures

By Sophia Rodrigues

     SYDNEY (MNI) - The performance of construction index for April was

published by AI Group/Housing Industry Association on Monday. Below are the five

key observations we made from the survey: 

     --Capacity utilization and employment rose further in April, indicating

continued pressure on the industry to invest and hire. Capacity utilization rose

to 80.9% from 79.3%, and was 1.7 percentage points above the 12-months average

of 79.2. Employment rose 3.8 points to 59.5, marking 12 consecutive months of

expansion and the highest since September 2014.

     --In line with expansion in employment, the wages sub-index rose 1.3 points

to 63.3, slightly above 12-month average of 63.2 points. The rise in employment

and wages is consistent with the recent surge in large-scale infrastructure

projects and other publicly-funded works which has made it difficult for

employers to fill related skilled vacancies.

     --Overall, the performance of construction index fell 1.8 points to 55.4,

expanding for 15 straight months but at a slightly slower pace in April.

Activity in the construction industry fell 5.4 points to 51.6 due mainly to

contraction in apartment construction.  

     --Commercial construction remained the strongest performing sector, though

in the latest month it eased 1.0 point to 64.0. The outlook for commercial

construction remains solid with new orders rising 7.4 points to 61.6 due to

approvals across major building categories including offices, education projects

and industrial premises.

     --New orders in the house building sector fell 4.1 points to 56.8 but

marked fifteenth straight month of growth. New orders in apartment building,

however, fell 4.1 points into contraction. In the engineering sector, new orders

expanded for fifteenth month but the rate of growth slowed. 

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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