With an onslaught of new orders and flat building increase, the construction sector turned into a beehive again in April as a new survey by the Australian Industry (Ai) Group-Housing Industry Association (HIA) performance of construction index (PCI) surged from 4.8 points in April to a seasonally adjusted 55.8 points.

The report said that all major sectors in the index spiked as more tenders and support for school building came up with spending spurred by federal government stimulus, with all figures reported breaching the 50 level which delineates expansion from contraction for two successive months.

Marking only the second time in the last 27 months to post an increase, the apartment building sub-index shot up 10.3 points to 58.8 points in April, as Ai group director Peter Burns observed that recorded increased activities in all sectors pointed to stabilising economic recovery.

He expressed confidence that the house building sub-sector has now been safely entrenched for recovery though it needs to grow further and provide more supplies to possibly arrest the rising house prices plaguing the property industry.

Dr Burns admitted that it would be a challenge considering that interest rates are constantly rising, yet more improvements were seen in the commercial and engineering construction sub-sectors, again for the second straight months.

He said that rising orders will only spur positive outlook as the industry looks forward for more encouraging developments in the next few months, stressing that "fiscal stimulus measures still feature strongly in total activity and will remain important to all construction sub-sectors health over the rest of the year."

The spikes in constructions activities and with more orders in line fuelled the employment index to soar by 56.8 points in April, as HIA economist Ben Phillips is upbeat that the industry has rebounded.

He said that flats and detached housing constructions were rising through 2010 with overwhelming demands from a steady growing population who also harbour better economic perspective.

He warned though that the recovery could encounter challenges ahead with prospects of further hikes in interest rates and ebbing government stimulus spending.

The Reserve Bank of Australia (RBA) instituted successive increases in the cash rate, with last two occurring in April, with a 4.25 percent hike, and just this week with a 4.5 percent leap.