The latest Australian Industry Group Australian Performance of Construction Index (Australian PCI) in conjunction with the Housing Industry Association has confirmed that new residential building activity remains weak.
According to the Index, the rate of contraction across the national construction industry slowed in December 2010.
Despite lifting 1.6 points, the seasonally adjusted index was 43.8 for the month, below the 50 point level separating expansion from contraction.
Housing Industry Association senior economist Andrew Harvey said that while the pace of decline had moderated, house building activity fell for a seventh consecutive month.
“With further falls in new orders for houses and apartments, this month’s Australian PCI report is one more piece of evidence that we are heading into a much weaker period for residential building.
“The wait for affordable land is one of the primary obstacles to new house building in greenfield areas, while the apartment market continues to struggle under tough credit conditions,” he said.
“A sustained period of contraction in both of these market segments will continue to lock many prospective home buyers into the rental market for years to come.”