Australia's construction activity growth has pulled back a little in December with a 52.8 Performance of Construction Index (PCI), according to the latest survey from the Australian Industry (Ai) Group.
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That number is down from 57.5 in November, although it remains above the boom-or-bust line of 50 points that separates expansion from contraction for the 11th consecutive month.

According to the Ai Group, the moderation was led by a slowdown in engineering and housing construction, managing to offset an improvement in the apartment sector.

"Across industry sub-sectors, engineering construction and house building remained the strongest performing areas of construction activity in December, however, the pace of activity growth in both sectors was well down on the solid increases recorded in November," the Group said.

"The rate of expansion in commercial construction was also slower in the month, although December marked the sector's eighth consecutive month of stable or expanding activity amid stronger property investor demand and improving business conditions more generally in 2017." 

Activity levels improved in all four sectors monitored, although most saw a slower improvement from a month earlier, with the strongest performers remaining engineering construction (down 7.2 points to 56.9) and house building (down 6.8 points to 54.5). 

The rate of expansion in commercial construction also slowed (down 8.3 points to 51.5), while apartment building posted an improved performance to record a marginal rate of growth (up 3.0 points to 50.7) - still well below the solid growth of May's 68.5-point high.

Overall construction activity dropped 6.2 points to 54.6 from November's historic high, while demand conditions were also more subdued with the new orders sub-index drifting into mild negative territory (down 7.5 points to 49.2).

Employment growth held relatively firm (down 0.4 points to 54.9), which was consistent with a solid backlog of work and scheduled project starts in 2018.

The input prices (up 3.9 points to 82.7) and wages (up 2.1 points to 64.4) sub-indexes climbed further in November, while the selling prices sub-index slipped 1.3 points to 58.6. This suggests that cost pressures are being passed on, but not broadly given strong market competition. 

"The country's construction sector continued to expand in December with employment rising and each of the four sub-sectors recording a lift in activity compared with the previous month," the Group said. 

"Builders and constructors reported higher input costs - with energy, construction materials and wages all on the rise. There are suggestions of an easing in conditions - December saw a pullback in activity growth and a modest decline in new orders.

"Looking at 2017 as a whole, even with the steady retreat in apartment building, construction activity was robust through the year. While the pace of growth may well ease, continued healthy levels of work across the industry look set to see a solid state to 2018." 

For a closer look at the Ai Group's Performance of Construction Index, click here.