Australia's construction sector is expected to continue expanding over the next few months even though the rate of new apartment building is slowing.
Engineering construction and house building continue to drive industry growth.
The overall construction sector grew in September, albeit at a slower rate, marking eight straight months of gains.
The Ai Group and Housing Industry Association Performance of Construction Index (PCI) for September slipped 0.6 points to 54.7 points in the month, but remained above the 50-point level indicating expansion.
Overall construction activity continued to be healthy, but the index recorded its lowest reading in almost a year.
Continuing engineering work and house building grew relatively strongly in September, but apartment building eased and commercial construction was flat.
Ai Group head of policy Peter Burn said construction sector employment had lifted again in September and wage growth had accelerated.
"With new orders still on the rise for the sector as a whole, the outlook over the next few months is positive even though the indications are for further contraction in the apartment sub-sector," Dr Burn said in a statement on Friday.
Housing Industry Association senior economist Shane Garrett said the construction index's retreat in September largely reflected the slowdown in apartment construction.
"New apartment building has grown to unprecedented highs over the past five years, and it is inevitable that we would see a retreat from these levels," Mr Garrett said.
Mr Garrett said residential building had been pulling back from record highs and will likely decline over the next couple of years, so the expansion of detached house building in September was welcome.
The survey showed that engineering construction was robust in September as government spending on infrastructure ramped up.
The house building sector expanded solidly, but apartment building slumped to its lowest level of activity in 11 months.
New orders for for houses increased at a slower rate in September, but have increased for eight consecutive months, suggesting that housing construction activity is likely to remain relatively form in coming months, with a solid backlog of work.
New orders for apartments continued to contract in September but at a slower rate.
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