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Construction industry continues to fall, engineering hit hard

Business in the Australian construction industry declined in August 2009, but at a rate slower than the previous month, posing hope that the industry is on the rise, according to the Australian Industry Group/Housing Industry Australian Performance of Construction Index (PCI).

The national construction industry rose by 2.9 points to 42.4, remaining below the 50-point level separating expansion from contraction.

Reductions in engineering and commercial construction were the main negative influences on activity in August, the PCI said. However, house building projects exhibited further resilience and increased for a second consecutive month, while the pace of decline eased considerably in the apartment sector.

“The latest results show that total industry activity is continuing to fall amid tight credit conditions and ongoing difficulties amongst firms in securing new project work, particularly within the engineering construction sector. Consequently, the industry experienced its 17th consecutive month of declining employment,” said the Australian Industry Group (Ai Group) associate director, economics and research, Tony Pensabene.

“However, more positive developments were the moderation in the pace of the industry’s contraction, and the continued growth in house-building activity, resulting in an easing in the pace of decline from the extreme lows of the start of the year.”

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