Construction activity in Australia slumped for the 10th consecutive month in December, a report by the Australia Industry Group and Housing Industry Association said Thursday.
The Performance of Construction Index declined 1.1 percentage points to 30.9 from 32 in the previous month. A reading above 50 indicates an expansion, while a reading below 50 signals a contraction.
The report said the fall in construction activity was attributed to poor demand conditions and lack of new project work, due to the ongoing financial and economic crisis. Intense competition for new contracts persisted, resulting in high failure rate for tenders and reduced order books.
Construction activity fell sharply, with the index slipping to 26.1 in December from 31.9 in the previous month, and represented the most rapid rate of decline in total industry activity since the survey began in September 2005.
House building and apartment building activity fell for the 11th consecutive month, while engineering construction declined for the fifth consecutive month and was the lowest level since September 2005. Commercial construction declined for the 10th consecutive month.
The average capacity utilization also fell to 72.5% in the month from 74.7% in November.
New orders in the sector fell at the fastest pace in the survey's history, with the index declining to 26.6 from 31.2 in the previous month. Moreover, the latest reading on new orders marked the 10th consecutive month of fall.
Declining demand contributed to further job cutting in the industry, but at a slower pace in the month. The employment index increased to 35.5 from 29.8 in November. However, December marked the ninth consecutive month that construction firms reduced their workforce. Wages also grew at a slower pace, with the index declining to 54.1 from 58.7.
The level of supplier deliveries continued to decline in December, but at a slower pace. The index rose to 41.3 from 37.5. Cost pressures increased in the month, with the input price index rising to 78.6 from 76.3. However, selling prices eased from November's trough, with the index rising to 47.2 from 35.2.
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