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Construction industry down in January; CFMEU urges Turnbull to stop “grandstanding”

According to the Australian Industry Group – Housing Industry Association Performance of Construction Index (Australian PCI), the construction industry sat at 34.1 points for January, well below the 50 point level separating expansion from contraction.However, signs of easing contraction were evident with the Australian PCI bouncing up 3.2 points on December’s 30.9 points.“January was another poor month for the construction industry, with the relentless pressures of tight credit conditions and deteriorating economic sentiment driving a further decline in activity,” Australian Industry Group associate director – economics and research Tony Pensabene said.The Construction Forestry Mining and Energy Union said the Australian PCI figures revealed an “urgent need” for the stimulus, and called on Turnbull to cease “grandstanding”.“Figures showing eleven consecutive months of contraction in the construction industry should be a cold splash of economic reality,” CFMEU construction division national secretary David Noonan said.However, Pensabene said it was not all bad news, with the rate of decline showing signs of easing with the Australian PCI up on December.He said the decline rate in building activity had lessened for the second month running, saying interest rate cuts and the first homeowners boost scheme were having a positive effect.Agreeing with Pensabene, HIA chief economist Harley Dale said: “We have seen a further interest rate cut and a substantial fiscal housing package aimed at stimulating residential construction sooner than later.”“This combination, together with the short-term boost available to first home buyers, creates a solid base for a recovery to emerge as we move through the year,” Dale said.

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