SYDNEY, Nov 6 (Reuters) - Australia's construction industry continued to grow in October though at a snail's pace as a recovery in apartment building was tempered by a pullback in housing and new orders, an industry survey showed on Friday.
The survey of 200 firms by Australia Industry Group and the Housing Industry Association found many complaining of difficult market conditions and intense competition in securing new contracts.
The survey's main measure of overall construction activity climbed 0.1 point to 50.9, just a little further above the 50 threshold between growth and contraction but still the highest reading since February last year.
Ai Group associate director public policy, Peter Burn, said the survey provided some encouraging signs of further improvement in the construction industry.
'Nevertheless, a more marked fall in commercial construction and a fifth consecutive month of decline in work undertaken on engineering shows that the pace of growth remains subdued and patchy,' he added.
'This reflects the on-going tightness of credit conditions, fewer new orders and excess capacity.'
The index of new orders dipped 3.0 points to 48.0, mainly due to a drop in the housing and commercial property sectors.
The measure of house construction took a steep 13.2 drop to 51.2 with firms linking the moderation to the recent lift in interest rates and the reduction in government grants to first home buyers.
The Reserve Bank of Australia (RBA) raised interest rates this week for the second time in as many months. Ironically, the central bank has been warning that a lack of housing supply was putting upward pressure on house prices, and so adding to the case for a rise in interest rates.
The sub-index for apartment building climbed 6.9 points to 53.2, putting it back into growth territory for the first time since early 2008. The engineering sector also showed an improvement as did employment and supplier deliveries.
(Reporting by Wayne Cole; Editing by Jonathan Standing) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) 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.
The survey of 200 firms by Australia Industry Group and the Housing Industry Association found many complaining of difficult market conditions and intense competition in securing new contracts.
The survey's main measure of overall construction activity climbed 0.1 point to 50.9, just a little further above the 50 threshold between growth and contraction but still the highest reading since February last year.
Ai Group associate director public policy, Peter Burn, said the survey provided some encouraging signs of further improvement in the construction industry.
'Nevertheless, a more marked fall in commercial construction and a fifth consecutive month of decline in work undertaken on engineering shows that the pace of growth remains subdued and patchy,' he added.
'This reflects the on-going tightness of credit conditions, fewer new orders and excess capacity.'
The index of new orders dipped 3.0 points to 48.0, mainly due to a drop in the housing and commercial property sectors.
The measure of house construction took a steep 13.2 drop to 51.2 with firms linking the moderation to the recent lift in interest rates and the reduction in government grants to first home buyers.
The Reserve Bank of Australia (RBA) raised interest rates this week for the second time in as many months. Ironically, the central bank has been warning that a lack of housing supply was putting upward pressure on house prices, and so adding to the case for a rise in interest rates.
The sub-index for apartment building climbed 6.9 points to 53.2, putting it back into growth territory for the first time since early 2008. The engineering sector also showed an improvement as did employment and supplier deliveries.
(Reporting by Wayne Cole; Editing by Jonathan Standing) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) 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.