Release Explanation: This report is the total amount spent by builders on both public and private construction projects. This helps traders build an economic picture of the trends of investments made in building projects, and therefore reads the sentiment that may eventually filter through to other areas of the housing and commercial building markets. The index surveys approximately 120 construction companies and asks respondents to rate the relative level of business conditions to include; employment, production, new orders, prices, supplier deliveries, and inventories.
Trade Desk Thoughts: The Australian construction sector contracted again in February to 29.5 from a 34.1 reading seen during January. The index fell at a fast pace as weak market demand and diminished confidence led to further cutbacks in new project work. The seasonally adjusted rate fell 4.6 points and remains below the crucial 50 level which denotes expansion from contraction. The worst conditions were faced in the apartment and commercial construction sectors. The principal issues facing the construction industry is the lack of funding availability, delays seen in planned works, and reluctant clients who are uneasy about commitments.
Forex Technical Reaction: This release has had little effect on the aussie with price steady at .6380 which is just below the neutral LFB pivot point.