The latest AIG-HIA performance of construction index for December was released earlier this morning with activity contracting at a faster pace that what was witnessed in November. Overall the index fell 1pt to 44.4 with the reading the weakest seen since February 2014. In what is a bad near-term sign for construction activity all four survey sub-sectors contracted during the month with gauges on home, apartment, commercial and engineering construction falling by 5.5pts, 14.3pts, 4.4pts and 0.1pts respectively. Adding to concerns, at 46.3, 43.7 and 41.6 respectively, the readings for home, apartment and commercial construction all sit at least 8pts below their 12-month series averages.
Looking at the individual survey components four of six measures deteriorated during the month with employment falling 2.1pts to 39.9, the lowest level seen since early 2013, while that for deliveries, input prices and selling prices registered declines of 1.7pts, 4.6pts and 2.7pts respectively. Somewhat surprisingly given the fall in the employment gauge wages recorded at increase of 0.6pts to 58.0 whilst that for new orders jumped 2.1pts to 46.1.
As the above graph shows the index recorded the largest fall in 2014 for all of the AIG indices, down some 6.4pts, with that for manufacturing falling by a smaller 0.7pts. The only indicator improve from was services, Australia’s largest industry sector, although it still remains firmly in contractionary territory.
To view the full AIG December PCI report follow this link: