Construction activity expanded to an all-time high in March, with the new orders, employment and delivery sub-indexes all reaching record highs.
The Ai Group and Housing Industry Association Performance of Construction Index (PCI) jumped 5.6 points to a high of 63.1 points in March, marking the 18 month of expanding or stable conditions and the longest run of expansion since 2005.
New orders jumped 11.2 points to 66.6 points in March, deliveries reached a high of 66.6 points and employment rose to 60 points as manufacturers gradually become more confident to employ more staff.
Seven of the eight manufacturing sub-sectors expanded in the month with the remaining sub-sector - textiles, clothing and furniture - stable at 49.8 points
Petroleum, coal and chemicals reached record highs while metal products and machinery and equipment also grew.
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The Ai Group said Queensland manufacturing performed particularly well, on the back of increase demand from a broad range of sectors including construction, mining, agriculture and renewables.
The food and beverages index slowed by 0.8 points, but remained above 50 points which indicates expansion.
Ai Group chief executive Innes Willox said while production and sales volumes are strong, energy prices, a revival of wage levels and an increase in the number of businesses reporting difficulty in hiring skilled staff, are constraining margins and the capacity for further expansion.
"These same pressures underline the importance to our economy of implementing policies to improve the competitiveness of our tax system," Mr Willox said on Tuesday.
