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Housing construction continues to downfall

Housing construction continues to downfall

2011-01-10 13:00:38

 

 

Activity in the construction industry remained relatively subdued in the month of December last year.
The latest data from the Australian Industry Group and Housing Industry Association shows the Performance of Construction Index increased by 1.6 points in the month to 43.8, but remains below the 50 point level which separates expansion from contraction.
The slight increase was supported by a higher level of engineering construction work, which was boosted by an increase in mining projects. But it was the only area to record growth.

Building activity in the housing sector was particularly weak, falling for the seventh month in a row.
"Weakness continues across the construction sector but is particularly evident in the residential housing and apartment sub-sectors," said AIG director of public policy Peter Burn.
"Expectations of further interest rate rises are having a significant impact on the sector."
The Australian Industry Group says the prospect of further rate rises is expected to hamper activity in the sector well into this year.
"The slower pace of decline in December is dampened by reports that new orders continue to fall in all four sub-sectors," said AIG director of public policy Peter Burn.
"Businesses and home buyers continue to refrain from committing to new projects with expectations of further rises in interest rates a likely factor."