SYDNEY, Jan 8 (Reuters) - Australia's construction industry stayed sluggish in December as activity contracted in the apartment and engineering sectors, though employment showed a promising pick up, a survey showed on Friday.
The survey of 200 firms by Australia Industry Group and the Housing Industry Association found tight credit conditions continued to hamper major projects, but work on new houses expanded for the sixth straight month.
The survey's main measure of overall construction activity rose 1.7 points to 49.3 in December, leaving it just below the 50 threshold that separates growth from contraction.
'The results clearly show that construction industry conditions remain tough overall with many businesses facing ongoing difficulties in securing new project work,' said AiG associate director public policy Peter Burn.
'While the stronger growth in house building is encouraging and provides critical support to overall levels of activity, the impact of higher interest rates and the removal of the first home buyers grant boost will test the durability of the housing recovery over the coming months,' Burn added.
The Reserve Bank of Australia (RBA) has lifted its main interest rate by 75 basis points since October to 3.75 percent.
The survey's measure of engineering activity dropped a sizable 7.9 points to 41.8, while for apartment building, it fell 5.8 points to 42.7.
In contrast, the index of house building firmed 2.3 points to 53.4, while commercial property rose 1.5 points to 48.9. The index of new orders edged up 0.5 point to 46.1.
There was a promising sign on jobs with the index of employment recovering 6.8 points to 52.6 in December, pointing to increased hiring.
The official labour report for December is due next Thursday and hopes are high it will show another solid increase in employment.
(Reporting by Wayne Cole; Editing by Balazs Koranyi) (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 2010. 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 tight credit conditions continued to hamper major projects, but work on new houses expanded for the sixth straight month.
The survey's main measure of overall construction activity rose 1.7 points to 49.3 in December, leaving it just below the 50 threshold that separates growth from contraction.
'The results clearly show that construction industry conditions remain tough overall with many businesses facing ongoing difficulties in securing new project work,' said AiG associate director public policy Peter Burn.
'While the stronger growth in house building is encouraging and provides critical support to overall levels of activity, the impact of higher interest rates and the removal of the first home buyers grant boost will test the durability of the housing recovery over the coming months,' Burn added.
The Reserve Bank of Australia (RBA) has lifted its main interest rate by 75 basis points since October to 3.75 percent.
The survey's measure of engineering activity dropped a sizable 7.9 points to 41.8, while for apartment building, it fell 5.8 points to 42.7.
In contrast, the index of house building firmed 2.3 points to 53.4, while commercial property rose 1.5 points to 48.9. The index of new orders edged up 0.5 point to 46.1.
There was a promising sign on jobs with the index of employment recovering 6.8 points to 52.6 in December, pointing to increased hiring.
The official labour report for December is due next Thursday and hopes are high it will show another solid increase in employment.
(Reporting by Wayne Cole; Editing by Balazs Koranyi) (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 2010. 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.