Australia's Construction Sector Is Booming In Early 2018 002
- Jul 13, 2018-
“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.”
With demand for workers increasing, firms also reported another large increase in wage growth during the month.
While good news for workers, the Ai Group said that contributed to increased margin pressures for firms.
“The input prices subindex registered 77.0 points in February — an increase of 2.6 points from January — indicating that cost pressures in the construction of building projects lifted during the month,” it said.
“Elevated cost pressures are being driven by robust demand for construction materials, escalating energy input costs and supplier price hikes related to strength in commodity prices.”
In contrast, the selling price subindex fell by 6.2 points to 52.7, suggesting that pressure rises in wages and other input costs are not being passed on in full.
“The widening gap between these price series demonstrates that strong pressures on profit margins persist for businesses in the construction industry,” the Ai Group said.
“This is consistent with reports of a highly competitive quoting and tendering environment.”