8 Oct 2012

Construction industry still going backwards

7:55 am on 8 October 2012

A slump in the Australian construction industry worsened at its fastest pace in the past year to September.

The Australian Industry Group - Housing Industry Association Performance of Construction Index declined 1.3 points to 30.9 last month.

A reading below 50 indicates contraction and the further below 50, the faster the contraction.

The ABC reports the index shows the construction sector has been going backwards for 28 consecutive months.

Apartment construction was the worst sector, at 26, with house building also struggling (28.5).

Australian Industry Group chief economist Julie Toth said mining-related building work is simply not making up for the extreme weakness in home building.

Even the engineering construction sector fell three points in September to 32.7, with companies reporting the negative effects of slower resource sector demand, project delays and import competition.

The ABC reports the survey of about 150 construction firms revealed employment continued to fall in line with a drop-off in projects. However wages kept growing at a moderate pace.