SYDNEY, Feb 7 (Reuters) - Activity in Australia's construction industry contracted for an eighth straight month in January as delays from flooding added to already weak project demand, an industry survey showed on Monday.
The survey of over 150 firms by Australia Industry Group and the Housing Industry Association cited stoppages caused by the floods, tight credit conditions, higher interest rates and diminishing work from school building projects.
The survey's overall construction index dropped 3.6 points in January to 40.2, the lowest since July 2009 and well below the 50.0 threshold between growth and contraction.
The index of apartment building took a steep 15.2-point dive to 23.4, while that for engineering retreated by 19.6 points to 38.7 as widespread flooding across Queensland state put a halt to some projects.
'While flooding and bad weather conditions have caused project delays and stoppages, higher interest rates, caution on the part of home buyers and businesses and tight credit conditions continue to hamper growth,' said AiG director of public policy Peter Burn.
'As the post-flood rebuilding task takes hold over coming months, the sector is likely to see a pick-up in activity in some regions,' he added.
The survey's measure of house building slipped 2.2 points to 37.3, while that for commercial construction fell 5.6 points to 38.6.
The index of employment fell back 6.9 points to 40.0, which could be a warning sign given the sector is a big employer. However, this survey has not had a good correlation with the official jobs series, which outstripped all expectations last year.
The official labour report is due out Thursday and analysts are looking for a solid rise in jobs of around 15,000.
(Reporting by Wayne Cole) Keywords: AUSTRALIA ECONOMY/CONSTRUCTION (Wayne.Cole@thomsonreuters.com; 612 9373 1813; Reuters Messaging: wayne.cole.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. 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 over 150 firms by Australia Industry Group and the Housing Industry Association cited stoppages caused by the floods, tight credit conditions, higher interest rates and diminishing work from school building projects.
The survey's overall construction index dropped 3.6 points in January to 40.2, the lowest since July 2009 and well below the 50.0 threshold between growth and contraction.
The index of apartment building took a steep 15.2-point dive to 23.4, while that for engineering retreated by 19.6 points to 38.7 as widespread flooding across Queensland state put a halt to some projects.
'While flooding and bad weather conditions have caused project delays and stoppages, higher interest rates, caution on the part of home buyers and businesses and tight credit conditions continue to hamper growth,' said AiG director of public policy Peter Burn.
'As the post-flood rebuilding task takes hold over coming months, the sector is likely to see a pick-up in activity in some regions,' he added.
The survey's measure of house building slipped 2.2 points to 37.3, while that for commercial construction fell 5.6 points to 38.6.
The index of employment fell back 6.9 points to 40.0, which could be a warning sign given the sector is a big employer. However, this survey has not had a good correlation with the official jobs series, which outstripped all expectations last year.
The official labour report is due out Thursday and analysts are looking for a solid rise in jobs of around 15,000.
(Reporting by Wayne Cole) Keywords: AUSTRALIA ECONOMY/CONSTRUCTION (Wayne.Cole@thomsonreuters.com; 612 9373 1813; Reuters Messaging: wayne.cole.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. 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.