The residential sector is leading growth in the construction industry.

7 November 2013 — The construction sector has experienced growth for the first time in over three years, according to the latest Australian Performance of Construction Index.

The index jumped 6.8 points to 54.4 in October, passing the 50 mark that indicates expansion.

The positive result was led by the residential sector, with apartments the highest performer on 66.2. Housing also rose by 3.8 points to 65.3. The new orders sub-index was 3.5 points higher at 54.3, reflecting an improvement in confidence and overall demand across construction in the month.

“The Australian PCI breaking into positive territory again for the first time in over three years is a milestone moment,” said Housing Industry Association chief economist Harley Dale.

“The residential sub-sectors are leading the way. What appears a sustained improvement in both the house and apartment activity and new orders sub-indices is consistent with a broader recovery evident for leading indicators of new home building.”

Australian Industry Group director, public policy, Peter Burn, said: “The sharp lift of the Australian PCI in October, which comes after a gradual easing of contractionary conditions over the past six months, is a very welcome indication that we could be on the cusp of the long-awaited recovery in the construction sector.

“Consolidation over the next few months will show whether a sustained recovery will be built on the combination of renewed confidence and low interest rates during the first half of 2014.”