The AIG/HIA Australian Performance of Construction Index declined sharply by 3.9 points from the previous month to 39.1 in July 2019, pointing to the steepest contraction in the construction sector since May 2013. Construction industry activity continued to contract (-0.5 points to 44.4), as new orders fell at the sharpest rate in six years (-5.5 points to 36.0) and deliveries from suppliers declined further (-1.5 points to 40.0). Employment also recorded a sharper rate of contraction (-7.7 points to 35.9) indicating a general reluctance by businesses to increase their workforce capacity amid ongoing soft demand at an aggregate level. On the price front, input cost inflation eased (-4.2 points to 63.2) while selling prices fell at a slower pace (+5 points to 36.6). By sector, apartment building was the weakest performing sector, contracting for the 16th consecutive month. Construction Pmi in Australia averaged 46.28 Index Points from 2005 until 2019, reaching an all time high of 60.50 Index Points in July of 2017 and a record low of 29.24 Index Points in December of 2008.
Construction Pmi in Australia is expected to be 47.00 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Construction Pmi in Australia to stand at 51.50 in 12 months time. In the long-term, the Australia Construction PMI is projected to trend around 50.00 Index Points in 2020, according to our econometric models.