The prevalence of apartment development across the country has been illustrated by last week’s release of the October Performance of Construction Index (PCI).
Compiled by the Housing Industry Association (HIA) and the Ai Group, the PCI measures whether the construction industry is in a period of expansion or contraction.
An index score of below 50 represents the construction industry is in a contraction period, while a score above represents expansion.
According to the latest PCI figures, the index enjoyed its third straight monthly increase during October, rising 0.2 points overall to 52.1 over the month.
The overall increase was driven by the building of apartments, which grew at the fastest pace in 10 years during October, jumping 9.2 points to 72.4.
That offset a fall in building levels for detached housing, which fell 9.8 points to 47.
The increase in apartment construction means the index kept its current streak of monthly improvements alive and Ai Group policy head Peter Burn said it appeared likely the apartment sector would continue to improve.
“The higher level of activity in the apartment sub-sector was sufficient to extend the overall construction sector expansion into a third month,” Burn said.
“Expectations of further growth in the months ahead will be encouraged by the higher levels of new orders recorded for the apartment, engineering and commercial construction sub-sectors. This is a further sign of the long-awaited broadening of the base of economic growth,” he said.
Outside of the residential sector, construction also increased in the commercial and engineering sectors and HIA chief economist Harley Dale said despite a predicted drop off in residential activity, the construction industry should continue to be an important part of the economy.
“The strong findings for apartments are consistent with the considerable pipeline of activity, while the overall trajectory for detached houses signals healthy construction in 2015/16, albeit off the cyclical peak of last year,” he said.
“There are signs emerging of a broadening strength to the construction industry - the results for the commercial and engineering construction sectors are encouraging."
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