NEW ORDERS, SUPPLIERS DELIVERIES HIT
RECORD HIGHS IN ASSISTANCE SCRAMBLE
INDUSTRY indexes for new orders, employment and supplier deliveries all hit record highs in March as house builders nationwide scrambled to commence residential projects as soon as possible in order to meet the final HomeBuilder deadline.
Conditions were positive but slower in apartment building, commercial building and engineering construction, according to the the Australian Industry Group/Housing Industry Association Australian performance of construction index, which climbed by 4.4 points to 61.8 in March, delivering the strongest monthly result in the index’s history.
Ai Group head of policy Peter Burn said the already fast-paced improvement in the construction industry lifted another gear in March with a record rise in the Australian PCI. All four construction sectors trended higher led by house building and engineering construction.
Employment grew at the most rapid pace in the history of the series and wages rose faster than at any time since the GFC.
Input prices surged due to a combination of high demand, supply constraints and rising freight costs for imported inputs. New orders went through the roof in March in part fuelled by the looming cut offs for the HomeBuilder program.
“While this surge in new orders is very likely to fade from here on, work will continue to flow through construction supply chains for many months and will provide ongoing stimulus to the sector and the broader economy,” Dr Burn said.
HIA economist Angela Lillicrap says the new highs reached in housing activity are consistent with the other leading indicators, including HIA’s new home sales survey and ABS building approvals data.
“Activity is being driven to new heights by a combination of the HomeBuilder program, record low interest rates and shifts in population away from apartments and capital cities towards detached housing and regional area,” Ms Lillicrap said.
“The record volume of work will see home building absorb workers from across the economy in 2021 and into 2022,” she said.