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New construction continues to contract

Staff Reporter 1 minute read

Construction activity registered a further decline in December 2008 as the economic crisis and a lack of credit continued to hamper market activity.

The latest Australian Industry Group (Ai Group) and Housing Industry Association (HIA) Performance of Construction Index released today fell 1.1 points in December to 30.9 – well below the 50 point level which separates expansion from contraction.

This was the tenth consecutive month that the index has sat below the crucial 50 point level.

Of all the construction sectors housing remained the worst performer although its reduction was less marked than in November.

HIA assistant director of industry policy Ben Phillips said weakness would persist in the high rise market as a result of the lack of available finance.

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The detached house market on the other hand should see an emerging recovery, he said, as a result of lower interest rates and fiscal stimulus. This recovery was however “unlikely to be of a large magnitude”, he said.


New construction continues to contract
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