Today’s Consumer Price Index figures are welcome news on the interest rates front and also for the development and construction industry, according to international building and construction consultants Davis Langdon.

Davis Langdon’s managing director Mark Beattie said the figures were lower than forecast and put core inflation back within the RBA’s target band of 2%-3% for the first time since June 2007 with the annualised core inflation rate now fallen to 2.7%.

The Producer Price Index – a measure of up-steam price pressures - released last Monday also suggests further deflation in the second half of 2010.

 “We expected that the inflation figure would be lower than forecast and with potential further weakening in the annual figure over the second half of 2010 the pressure has come off cash rate increases,” he said.

Mr Beattie said Davis Langdon’s most recent research showed that construction industry conditions were still very volatile and a pause in the increase in interest rates would be more than welcomed by the industry. “If the figure today did put further pressure on the RBA to move rates in August I think a lot of people would have been very concerned,” he said. 

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au 

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