Construction activity has expanded for a third straight month, driven by the fastest pace of growth in apartment building on record.

The Performance of Construction Index climbed 0.2 points to 52.1 in October to remain above the 50-point level separating expansion from contraction.

The slight acceleration in the pace of growth comes after apartment building surged at its fastest pace in the 10-year history of the Australian Industry Group and Housing Industry Association index.

This offset house building, which slipped into negative territory, and a further contraction in engineering building, Ai Group head of public policy Peter Burn said.

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“(More) growth in the months ahead will be encouraged by the higher levels of new orders recorded for the apartment, engineering and commercial construction sub-sectors,” he said.

“This is a further sign of the long-awaited broadening of the base of economic growth.”

HIA chief economist Harley Dale said the strong findings for apartments are consistent with the considerable pipeline of activity.

Mr Dale said there was a sharp monthly decline in the house building sub-index.

“(But) the overall trajectory for detached houses signals healthy construction in 2015/16, albeit off the cyclical peak of last year,” he said.

“There are signs emerging of a broadening strength to the construction industry – the results for the commercial and engineering construction sectors are encouraging.”

– AAP