Australia’s construction sector rebounds in June, hits 10-month record high

Australia’s construction sector rebounded in June, hitting a 10-month record high during the month, after having witnessed decline during the month of May. The expanding pace of construction came in two months after the Reserve Bank of Australia reduced the interest rate by 25 basis points to 1.75 from 2 percent

The Australian Industry Group’s Performance of Construction Index (PCI) surged 6.5 points to 53.2, data released by the Ai Group showed Thursday. Before the rate cut, the PCI was 46.7, well below the 50-point benchmark point that separates expansion from contraction.

"The construction sector hit a sweet spot in June with the bounce in the Australian PCI driven by growth across all of the sub-sectors and with solid gains in activity, employment and new orders," said Peter Burn, Head of Policy, Ai Group.

Moreover, all four sub-sectors have witnessed expansion as well, besides the PCI. Engineering went up 7.5 points to 50.7, commercial grew back to 53.3, residential increased by a whopping 13.7 points to 55.2 due to apartment activity and house building reached 62.1.

Further, there were positive signs on the hiring front as well, as the employment sub-index rose 4.9 points to 53.9, indicating that hiring levels increased. Housing construction also recorded its strongest expansion in the past 30 months, jumping 9.2 points to 52.1.