And combined with ongoing strength in engineering and commercial construction, it all points to a sector that is enjoying a strong start to 2018.
The Australian Industry Group’s (Ai Group) Performance of Construction Index (PCI) rose 1.7 points to 56.0 in January, leaving it at a three-month high.
The PCI measures perceived changes in activity levels across Australia’s construction sector from one month to the next. Anything above 50 signals that activity levels are improving while a reading below suggests they’re deteriorating. The distance away from 50 indicates how quickly activity levels are expanding or contracting.
So at 56.0, activity levels not only improved in February, they did so at a faster pace than January.
The Ai Group reports that activity levels have now improved in each of the past 13 months.
Helping to fuel that improvement, the group said activity levels improved at a faster pace in three of the four sub-sectors surveyed in February.
“House building was the strongest performing area of construction activity in February with its rate of growth lifting solidly due to an upturn in demand and a significant backlog of work,” the Ai Group said.
“Activity in the apartment building sector also showed improvement, expanding at a relatively robust rate after broadly stable conditions over the previous two months.
“House building respondents commented on an increase in customer enquiries in February and a continuation of relatively firm first home buyer activity.”
“However, commercial builders experienced slower growth in new orders in February, while demand conditions in the apartment building sector were largely stable in the month.”
Like the headline PCI, a reading above 50 indicates that activity levels improved from one month earlier.
With activity levels strengthening across all sectors, employment growth also accelerated from what were already high levels.
“The employment subindex rose by 0.8 points to 58.8 points, indicating a slightly faster rate of growth,” the group said.
“Rising employment reflects the healthy level of work at present and the need for businesses to ensure sufficient resources are in place to meet future demand.”