The construction industry has entered the realm of growth for the first time in 2014, according to the latest Australian Industry Group/Housing Industry Association (HIA) Australian Performance of Construction Index (Australian CPI).
The seasonally adjusted index grew 5.1 points over June to break through the threshold of 50, an indication of expansion in activity. It now sits at 51.8 points. This expansion follows a slow preceding five month period.
The industry's expansion is largely underpinned by the improvements in the home building sector. House building growth shot up by 2.2 points to 56.6 over the month of June, its tenth consecutive month of expansion. The rate of increase actually accelerated in June.
This follows news that May was a particularly strong month for building approvals, with approval numbers rocketing up in Queensland and New South Wales in particular. This increase in housing construction is being driven by growing demand for housing from buyers at a time when historically low interest rates are increasing the affordability of home loans.
It also being underwritten by the growth in population across Australia's capitals. Numerous infrastructure projects, such as enhanced public transportation and new motorways, are springing up around the country to accommodate growing communities, which explains the prevalence of traffic signs around Aussie roads.
According to the HIA, engineering construction experienced an unexpected rise in activity due to local government and infrastructure projects, singling out the backlog of work starting on the east coast. Engineering construction jumped a significant 16.3 points to hit 51.1 in June, sending it into expansion alongside other industries.
Builders and tradies might also want to note that selling prices were higher, at a value of 50.6, although input prices were also larger at 73.7.