The Australian Industry Group and HIA Australian Performance of Construction Index (Australian PCI®) fell by 1.4 points to 46.5 points in September (seasonally adjusted). This indicates contraction in activity across the construction sector for the fourth month and the rate of decline increased compared to August. Results below 50 points indicate contraction in the sector, with lower results indicating a stronger rate of contraction.
- Two of the four construction sectors – housing and apartments – were in deep contraction in September. Activity improved in the commercial sector and was stable in engineering.
- Demand side pressures, including rising interest rates and economic uncertainty, are dampening consumer-facing construction sectors from elevated levels see during the pandemic.
- Supply side constraints continue to inhibit growth, but there are early signs of supply chain pressures easing. Construction employment also improved.
- The selling prices indicator grew again to 77.2. While input prices fell slightly, at 88.6 the indicator remains higher than selling prices.
- Capacity utilisation rose slightly to 83.2%, it has been sustained at highly elevated levels since the end of 2020.