SYDNEY, Feb 6 (Reuters) - Activity in Australia's construction industry contracted for the 11th straight month in January as a lack of credit caused customers to delay or cut back on projects, a survey of 120 firms showed on Friday.
Yet the pace of deterioration slowed somewhat and there were tentative signs of stabilisation in housing, new orders and employment, albeit at very low levels.
The Australian Industry Group/Housing Industry Association performance of construction index (PCI) rose 3.2 points to 34.1 in January, though that left it well below the 50.0 level separating expansion from contraction.
'January was another poor month for the construction industry, with the relentless pressures of tight credit conditions and deteriorating economic sentiment driving a further decline in activity,' said Tony Pensabene, AIG's associate director, economics and research.
'We are continuing to see weakness on a broad industry front, with intense competition for contracts with many firms reporting clients are either scaling back or deferring planned project developments,' he added.
The dearth of credit took the biggest toll on apartment building, with that index dropping 2.6 points to 26.8. In contrast, the construction of housing measure rose 8.5 points to 31.9 perhaps benefiting from steep cuts in interest rates.
The Reserve Bank of Australia (RBA) has cuts its key cash rate by 4 percentage points since September taking it to a record low of 3.25 percent.
The survey's index of new orders rose 2.3 points to 28.9, while the measure of sales edged up 3.8 points to 29.9. The measure for employment also picked up to 37.3 in January, from 35.5 the month before and a low of 29.8 in November.
There was a continued deceleration in the growth of input prices, with that index dropping to 68.2 from a peak of 90.9 back in July.
(Reporting by Wayne Cole; Editing by James Thornhill) Keywords: AUSTRALIA ECONOMY/CONSTRUCTION (wayne.cole@reuters.com ; +61 2 9373 1813; Reuters Messaging: wayne.cole.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Yet the pace of deterioration slowed somewhat and there were tentative signs of stabilisation in housing, new orders and employment, albeit at very low levels.
The Australian Industry Group/Housing Industry Association performance of construction index (PCI) rose 3.2 points to 34.1 in January, though that left it well below the 50.0 level separating expansion from contraction.
'January was another poor month for the construction industry, with the relentless pressures of tight credit conditions and deteriorating economic sentiment driving a further decline in activity,' said Tony Pensabene, AIG's associate director, economics and research.
'We are continuing to see weakness on a broad industry front, with intense competition for contracts with many firms reporting clients are either scaling back or deferring planned project developments,' he added.
The dearth of credit took the biggest toll on apartment building, with that index dropping 2.6 points to 26.8. In contrast, the construction of housing measure rose 8.5 points to 31.9 perhaps benefiting from steep cuts in interest rates.
The Reserve Bank of Australia (RBA) has cuts its key cash rate by 4 percentage points since September taking it to a record low of 3.25 percent.
The survey's index of new orders rose 2.3 points to 28.9, while the measure of sales edged up 3.8 points to 29.9. The measure for employment also picked up to 37.3 in January, from 35.5 the month before and a low of 29.8 in November.
There was a continued deceleration in the growth of input prices, with that index dropping to 68.2 from a peak of 90.9 back in July.
(Reporting by Wayne Cole; Editing by James Thornhill) Keywords: AUSTRALIA ECONOMY/CONSTRUCTION (wayne.cole@reuters.com ; +61 2 9373 1813; Reuters Messaging: wayne.cole.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.