The Ai Group and HIA Australian Performance of Construction Index (Australian PCI®) fell by 3.2 points to 43.3 points in October (seasonally adjusted). This indicates contraction in activity across the construction sector for the fifth month and the rate of decline increased compared to September. Results below 50 points indicate contraction in the sector, with lower results indicating a stronger rate of contraction.

• All four construction subsectors were in contraction in October. This is the first time all sectors have declined in the Australian PCI® since August 2021.
• The employment index fell into contraction recording the lowest result since July 2020.
• Demand-side pressures, including rising interest rates and economic uncertainty, are dampening construction sales and new orders.
• Supply-side constraints, especially a shortage of skilled trades, continue to inhibit activity, but there are signs of materials supply chain pressures easing.
• The selling prices indicator was virtually unchanged at 77.1. While input prices moderated, at 83.7 the indicator remains higher than selling prices.
• Capacity utilisation fell slightly to 82.8% but remains elevated as it has been since the start of 2021.