AUSTRALIA'S construction sector contracted for the sixteenth consecutive month in June, and builders signalled further weakness in 2009.
The continued slump in construction comes as the aftershock of multibillion dollar fiscal stimulus packages designed to boost home building begins to wear off, leaving the sector to pin its hopes on the impact of generational low interest rates.
The Australian Industry Group-Housing Industry Association Performance of Construction Index fell 4.3 points in June from May to 42.6, below the 50-point mark which separates contraction from expansion.
Although all sectors of the index recorded a decline, the weakest was apartment building, along with engineering and commercial construction projects.
House building fell for a seventeenth consecutive month, falling 1.3 points in June to 44.0, although still 14.3 points above its April 2009 levels.
Apartment building fell 13.1 points to 35.3, while engineering construction dropped 9.6 points to 41.1, rolling back a modest growth spurt in May.
Commercial construction fell by 7.2 points to 38.4.
Housing Industry Association senior economist Ben Phillips said that because the government's fiscal packages were wearing off, the outlook for building was pallid.
"Prospects for growth over the remainder of 2009 will fall upon the currently very weak investor and trade-up buyer markets," Mr Phillips said.
The Australian Industry Group’s associate director of economics and research, Tony Pensabene, said that builders were resting their hopes on the afterglow of very loose monetary policy conditions and a trickle through effect from the government's first home owners grants.
"It is possible that these weaker housing conditions will be temporary," Mr Pensabene said.
Builders will be watching the outcome of today’s monthly policy meeting of the Reserve Bank of Australia, due at 2.30pm (AEST), at which the central bank is expected to keep rates steady at 3.0 per cent, although analysts will be watching for any change in its outlook for demand.
Jenny
Source
The continued slump in construction comes as the aftershock of multibillion dollar fiscal stimulus packages designed to boost home building begins to wear off, leaving the sector to pin its hopes on the impact of generational low interest rates.
The Australian Industry Group-Housing Industry Association Performance of Construction Index fell 4.3 points in June from May to 42.6, below the 50-point mark which separates contraction from expansion.
Although all sectors of the index recorded a decline, the weakest was apartment building, along with engineering and commercial construction projects.
House building fell for a seventeenth consecutive month, falling 1.3 points in June to 44.0, although still 14.3 points above its April 2009 levels.
Apartment building fell 13.1 points to 35.3, while engineering construction dropped 9.6 points to 41.1, rolling back a modest growth spurt in May.
Commercial construction fell by 7.2 points to 38.4.
Housing Industry Association senior economist Ben Phillips said that because the government's fiscal packages were wearing off, the outlook for building was pallid.
"Prospects for growth over the remainder of 2009 will fall upon the currently very weak investor and trade-up buyer markets," Mr Phillips said.
The Australian Industry Group’s associate director of economics and research, Tony Pensabene, said that builders were resting their hopes on the afterglow of very loose monetary policy conditions and a trickle through effect from the government's first home owners grants.
"It is possible that these weaker housing conditions will be temporary," Mr Pensabene said.
Builders will be watching the outcome of today’s monthly policy meeting of the Reserve Bank of Australia, due at 2.30pm (AEST), at which the central bank is expected to keep rates steady at 3.0 per cent, although analysts will be watching for any change in its outlook for demand.
Jenny
Source