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How’s the Australian construction industry going so far in 2017?

The industry association AI Group (Australian Industry Association) has published their latest survey results for January 2017 in construction.

The results show continued sluggish conditions across all sectors, with the overall figures indicating a fourth consecutive month of slow contraction, although January is starting to edge toward expansion again.

Let’s dive into the report and take a look at what’s happening in the four construction sub-sectors (houses, apartments, commercial and engineering / infrastructure).

Note: AI Group indicates results using an ‘index’ that has a default value of 50 points. Values of over 50 indicate expansion, while values under 50 indicate contraction (shrinking). The distance of the index from 50 indicates the strength of the expansion or contraction.

Houses

The residential house building sector has been slowly declining over the last five months. In January this has stabilised however, coming in at 50.2 points.

Hopefully this figure indicates some expansion throughout 2017.

Apartments

After a boom in the early second half of 2016, apartment building has fallen back into contraction with a figure in January of 46.5 points.

This is up slightly from last month however, so conditions may continue to be stable in 2017.

Commercial

The commercial construction sector has also been contracting for the last five months. January’s figures show an index of 47.5 points, showing a further slowing into contraction compared to December.

AI Group cite reduced public spending and subdued investor sentiment as factors affecting this result.

Engineering

Engineering includes infrastructure such as roads, bridges and utilities. January showed an increased contraction on the back of the last three month’s slowing results, down to 42.8 points.

This reflects the impact of the continued downturn in mining investment and heavy industry.

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