Home Building Drives Construction Jobs

Home building rates are boosting employment in Australia’s construction industry, according to the latest data. The Australian Industry Group/ Housing Industry Association Performance of Construction Index reached 55.0 in August, increasing 2.4 points from July.

This is the third consecutive month of expansion for the industry. These results are being driven by solid growth in house and apartment building, which has outweighed the recent decline in engineering construction.

Apartment building levels have strengthened significantly, increasing by 13 points this month. House building activity rose by 7.7 points, demonstrating the sector’s highest performances since November 2013.  

The employment sub-index reached 53.7 in August, an increase of 2.4 from the previous month. Housing Industry Association economist Diwa Hopkins, said that the rise in employment for the construction industry is largely attributed to housing and apartment projects.  

“The labour-intensive nature of construction means that growth in this sector and the associated job creation can make a significant contribution to improving broader labour market outcomes,” Ms Hopkins said.

House builders reported that customer enquiries buyer confidence remained strong. Businesses that raised employment, said it indicated an improvement in workloads. Wages growth continued at a slower rate, with the index for August reaching 60.3 points.

Capacity utlisation increased to 74.6% in August, rising above the annual average of 72.5%. New orders and input prices also experienced growth during this period.

This report follows figures released by the Australian Bureau of Statistics, highlighting surges in residential construction in the June quarter.

Diwa Hopkins said that the strengthening residential construction rates were a result of increases in the construction of detached houses. 

"These developments are largely in line with what we have been expecting of the current new home building cycle; that larger improvements in detached house building activity, would follow in the wake of the previously strong growth experienced by the multi-unit segment of the market," she said.

Engineering construction, in contrast, has fallen 3.5 points in August. According to the report, this is due to a decline in resource-related construction and a lack of new projects in place of completed works.

Experts say that the high performance seen in residential construction helped the construction industry rebalance and adjust to the engineering decline.  

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