11 Apr 2010

Demand in Australian building sector slumps

12:20 pm on 11 April 2010

Construction sector demand fell in Australia in March, with residential building falling flat after several months of growth.

The Performance of Construction Index by the Australian Industry Group and the Housing Industry Association fell 4.1 points to 48.7 in March, the ABC reports.

It is now below the key 50-point level that indicates expansion.

Home building activity was muted, while apartment building and engineering construction extended declines from previous months.

However, the gradual recovery of commercial construction that has been evident since January continued.

Australian Industry Group spokesman Peter Burn says the big fall in new house and apartment orders comes at a time when there is already a shortage of housing.

Dr Burn says businesses attributed the decline in housing new orders to the end of the first home buyers' boost and the five official interest rate increases since October.