All four construction sectors in the Australian PCI contracted this January, with weakening in house-building, apartment-building, commercial construction and engineering construction. HIA senior economist Georgan Murray raised concerns around the flag of construction slowdown while blaming the downturn in the Sydney and Melbourne housing markets. Murray suggested that this was due to the recent boom and subsequent oversupply in residential housing built over the last five years.

Ai Group head of policy Peter Burn said: “The adjustment in the residential construction sub-sectors continued in January with both apartment and house building performance slipping further. While the decline in activity is now well established, levels of activity remain respectable by historical standards reflecting the dimensions of the preceding boom.”

“The performance of the commercial construction and engineering construction sub-sectors also remained in negative territory. With infrastructure projects still providing major sources of activity, engineering construction looks set to underpin the overall construction sector in the foreseeable future. Sector-wide employment was lower in January having held up amid shrinking activity in recent months.”