Australian construction had a slow May, according to the Performance of Construction Index. The country dropped 4.1 points down to 46.7. A good construction month is usually past the 50 point mark. The measurements are done by an Australian company known as the Ai Group (Australia Industry).
Head of Policy for Ai Group, Peter Burn, said: “With new orders lower across all parts of the industry in May, the immediate outlook is for further weakness. There are, nevertheless, some emerging signs of a pick-up in non-mining related engineering construction with a growing pipeline of infrastructure projects.”
Ai Group, however, did indicate that apartment building and commercial construction was the hardest hit with losses in the research. The group confirmed that the lack of new orders has caused the fall, and it is the most significant fall since February 2015. Australia joins Britain who is also struggling to improve the number of orders in construction.
Ai Group did, however, confirm that manufacturing in May was down by 2.4 points but remained above the 50 point comfortability barrier.
Britain
Interestingly, British manufacturing might be improving despite subpar construction numbers due to the impending EU Referendum. It is a slow improvement due to the numbers that turned for the worst during the first quarter of the year.
EEF chief economist, Lee Hopley, spoke to Reuters, saying: “While all of this suggests that manufacturing is coming out of the mire of the past 18 months, even a decent six months in the latter part of the year will still leave output broadly flat over 2016 as a whole. If however a vote to leave the EU, we can expect a very significant period of political and economic uncertainty which will see the sector facing uncharted waters for some time to come.”
So, if Britain exits the EU it would damage the improvement that manufacturing is currently seeing. If true, this would mean even more losses of jobs in the manufacturing industry which has already lost 385,500 since 2008, a study confirmed.
Source: The Australian / Reuters
