RESERVE BANK RATE RISES DRIVING DOWN CONSTRUCTION
Construction across the country in housing, apartments and commercial—all fell in June, with industry blaming ongoing interest rate rises, labour shortages and supply chain issues.
The Australian Performance of Construction Index fell by 4.2 points to 46.2 in June, after months of positive or stable construction activity.
According to the index, measured by the Australian Industry Group in conjunction with the Housing Industry of Australia, readings below 50 show a contraction in activity.
Across the sectors:
- Housing activity across Australia fell 4.3 points to 39.2
- Apartments fell 4.5 to 41.7
- Commercial sector was down by 8.4 to 38.5 points.
- Only the engineering sector—which covers bridges, roads and industrial (factories & warehouses) had an increase in activity, rising 5.3 points to 57.1.
Houses and apartment buildings, are particularly affected by rising interest rates.
Builders also had to contend with labour shortages and an almost 12-month-long rise in wages, according to the index.
The supply of building materials deteriorated further in June, decreasing by 5.6 points to 39 points. All sectors reported delays and shortages in supply.
Author: Ralph Nicholson