Australia construction sector expands in July

The Australian Industry Group (AiG) reported that its construction index rose 4.5 points to 60.5 in July. That was the highest reading since the indicator's inception in 2005 and marked the sixth straight month of expansion in the sector. A reading above 50 indicates expansion, while a reading below 50 signals a contraction in activity.

According to the report, the July upturn in industry conditions reflected expanding activity across all four major construction sectors, namely the house building, apartment building, commercial and engineering construction sectors.

The activity sub-index recorded a solid improvement in July, rising 5.2 points to 58.3. New orders expanded in July by 2.7 points to 64.6 points, signaling the highest rate of expansion in new orders in the 12 years since the start of the survey. The supplier delivery index increased by 6.4 points in June to 59.2 points, indicating the highest rate of growth in almost three years. In addition, businesses increased their workforces, with employment index rising by 4.8 points to 59.0 points in July, marking the highest growth in almost three years. The input prices sub-index surged by 7.4 points to 73.6 points in July, pointing to the fact the cost pressures in the construction of building projects intensified during the month.