Construction sector hits 3.5-year high

Australia's construction sector recorded its most positive results in three-and-a-half years last month, according to new research.

The Australian Industry Group (AIG)/Housing Industry Association Australian Performance of Construction Index jumped 3.9 points to 47.6 in September.

This remains short of the benchmark 50 points needed to exhibit break-even growth, but remains the best reading since April 2010.

Homeowners considering renovating the bathroom or garden DIY to add value to their property may be encouraged to hear that the improved performance is largely due to low interest rates and a lift in buyer sentiment for dwellings.

AIG chief economist Julie Toth stated that the industry looks to be close to stabilising, although there may still be tough times ahead.

"Nevertheless, with new orders increasing for the first time since May 2010, there are grounds for cautious optimism that the current improving trend can be sustained in coming months," she explained.

Harley Dale, chief economist at the HIA, echoed these sentiments, saying that the move into positive territory for houses and apartments is "very encouraging".

"We are hopeful the gains will prove more sustainable this time around and obviously a broader improvement needs to emerge over time," he stated.