The Australian Industry Group Performance of Construction Index (PCI) jumped 6.8 points to 54.4 in October expanding for the first time since 2010.
This is another piece of the puzzle that says that monetary policy still works in Australia and is starting to gain real traction in the economy.
The really good news is that AiG reported that it was residential construction which lead the way higher even though all sectors are now growing.
Confirming the recent building approvals data which showed a huge jump in apartments, the apartments sub-index in the PCI rose 8.5 points to 66.2 with housing up 3.8 to 65.3 with new orders also higher.
All in all its a great number for the economy in need of transition and the RBA is on the record as saying that increased construction activity is a pre-condition for this transition to occur effectively.
Housing Industry Association, who co-author the survey, Chief Economist Harley Dale said “The Australian PCI breaking into positive territory again for the first time in over three years is a milestone moment.”
The RBA will be pleased with this result but also that the Aussie dollar has paid it no heed.