Released on Wednesday, the Australian Industry Group/Housing Industry Association Performance of Construction Index (PCI) report for July 2019 reveals a 3.9 point slump, the sharpest drop in six years.
The fall means the construction index now sits at 39.1, well below the 50-point mark that denotes the line between expansion and contraction.
It's the latest bad news for an industry that has been struggling in the wake of significant market slowdown. The PCI has charted slowing development across both apartment and home building activity for 16 months and 12 months respectively. Building approval has dropped too, with 25.6 percent less projects receiving approval over the last year despite government efforts to shore up work.
"Across the residential construction sectors, the ongoing decline in new orders is continuing to weigh on overall conditions and points to the likelihood of further weakness in the months ahead," says the report.
The outlook looks more positive in other sectors. While still recording a decrease, the rate of decline in commercial construction slowed in July, while engineering construction remains stable.
The report comes less than a week after Sydney-based apartment developer Ralan Group collapsed, leaving behind $500 million in debt. It was the second major developer to close over the last two months.
To read the full PCI report, click here.
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