AUSTRALIA,.. An expansion in Australia's construction industry accelerated in December, boosted by new infrastructure projects and commercial property building.

The construction index rose 6 points to 59.2, according to a report by the Australian Industry Group and Housing Industry Association released in Sydney today. A reading above 50 indicates the building industry is expanding.

Increased construction will help spur Australia's A$1 trillion ($870 billion) economy, now in its 17th year of expansion, even after the nation's central bank raised its benchmark interest rate to the highest in 11 years in November.

"The non-residential markets in particular are providing a major stimulus to activity, highlighting the considerable backlog of work in infrastructure products,' said Tony Pensabene, associate director of economics and research at the Australian Industry Group.

A gauge of home building climbed to 59.8 points from 52.5 points in November, today's report showed. An index of apartment building slipped 3.2 points to 46.7.

"As we move through 2008, we should see a modest pickup in home building, although we remain of the view that any sustained recovery is unlikely to be forthcoming until the second half of the year,' said Harley Dale, chief economist at the Housing Industry Association.

Today's survey is based on responses from about 120 construction companies on new orders, employment and input costs. (By Jacob Greber)