The Australian Industry Group and HIA Australian Performance of Construction Index (Australian PCI®) fell slightly by 0.9 points to 45.3 points in July (seasonally adjusted). This indicates contraction in activity across the construction sector for the second month following four months of positive or stable conditions. Results below 50 points indicate contraction in the sector, with lower results indicating a stronger rate of contraction.
- Three of the four construction sectors – housing, commercial and engineering – were in contraction in July. Activity indexes were higher than in June for the apartments and commercial sectors.
- House builders reported higher interest rates constraining new orders, which fell again in July.
- Increased interest rates were the main concern for respondents across all sectors. Labour shortages and delays in supplier deliveries continued to inhibit activity.
- Capacity utilisation moderated slightly to 80.6% the lowest it has been since August 2021.