Access to credit drags construction industry

By |

Australia's construction industry marked its 13th consecutive month of decline in September, dragged by the slump in apartment and engineering works, according to the latest Australian Performance of Construction Index (PCI) report.

The PCI, based on a survey of construction industry purchasing managers, fell to 42.6 points in September. A reading below 50 indicates a contraction in the industry. The Housing Industry Association (HIA) and Ai Group produce the monthly index.

The index remained in the red despite the improvement in detached housing. The segment’s pace of decline slowed as the sub-index rose to 46.2.

"Both the activity and new orders indexes in house building recorded further increases in September, suggesting the pace of decline in this part of the industry at least has eased noticeably over recent months," Peter Burns, head of policy at Ai Group, told The Australian Financial Review.

The report said apartment building remained the weakest-performing area, declining for an 18th consecutive month, and at an accelerated rate. The apartment sub-index fell by 0.9 points to 33 points in September. The engineering index also fell to 39.3 as new orders continue to decrease.

This could be due to the lack of demand from investors, who are still testing waters in the housing market. A recent survey by the Property Investment Professionals of Australia (PIPA) found that while 82% of investors believe now is an excellent time to get back to the market, they are still concerned about the stricter access to credit and the state of the Australian economy.

The construction industry is hoping that the recent rate cuts could spur confidence and boost activity from investors.

"Recent interest rate cuts have contributed to the stabilisation of home prices, following persistent declines over the last couple of years. This is a sign that confidence in the housing market has improved although the volume of property transactions remains low," HIA economist Tom Devitt said.

Top Suburbs : south brisbane , torrensville , whyalla , woolloongabba , goulburn

SHARE

Get help with your investment property



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here