Home building appears to have boosted the construction sector, while engineering work dries up.

The Australian Industry Group’s Housing Industry Association Performance of Construction Index jumped 6.2 points in March, placing it just barely back into expansionary territory at 50.1.

The 50-point level separates expansion from contraction.

The improvement came largely from a 10.4-point surge in house building and a 5.2 point rise in commercial construction.

Meanwhile, engineering construction - much of which is mining-related - slid to a 10-month low of 41.2.

“Renewed strength in house and apartment building drove the Australian construction industry back into growth territory in March,” said Australian Industry Group's head of policy Peter Burn.

“The lift in these residential construction sub-sectors from already healthy levels more than compensated for a steeper fall in engineering construction in line with the retreat from investment in mining-related projects and further weakness in commercial construction.

“While new orders for residential construction look positive for the near term, the time is now ripe for higher levels of investment in commercial construction and particularly in infrastructure.”

The new orders sub-index rose 12.1 points to 50.8, pushing the bellwether of future activity into positive territory for the first time in five months.