Construction Sector Takes a Hit Again

In May and June, cuts in the interest rate were introduced by the central bank. This stimulus should have been enough to affect consumer spending but people are still hesitant.

Peter Burn, the Australian Industry Group (Ai Group) director of public policy said that the construction sector is still facing slow demand.

Andrew Harvey said that a quarter of a percentage point cut in June and a half percentage point in May did not produce the results the bank hoped for. Harvey is a senior economist from the Housing Industry Association (HIA).

In fact, for the 26th consecutive month, the construction sector has slumped with the construction index (PCI) going down 2.2 more points to 32.6 in July, according to the Australian Industry Group-Housing Industry Association’s (AIG-HIA) performance.

According to the AIG-HIA, a reading that is below 50 points is a sign of contraction in activity and unfortunately, all four sub-sectors in construction are experiencing this. The hardest hits are the housing and commercial construction.

Although there was a slight upswing in apartment construction and engineering construction in July, the decline in employment levels still fell everywhere else in the country. Looking at the financial year, the numbers are not promising.