Oct. 7 (Bloomberg) -- A gauge of Australia’s building industry showed the weakest reading since February 2009 as new orders sank to a record low.
The construction performance index dropped 2.1 points to 30 in September, according to a survey by the Australian Industry Group and the Housing Industry Association released in Sydney today. The result was the 16th consecutive month under 50, the dividing line between expansion and contraction.
The Reserve Bank of Australia this week left its benchmark interest rate unchanged at 4.75 percent, citing a “softer” labor market and consumers who are “more concerned about the possibility of unemployment rising.” The RBA signaled less concern about wage pressure from a mining investment boom and said there’s more scope to cut rates if necessary.
“The construction sector continues to struggle in the face of subdued demand and low levels of investor and consumer confidence,” said Peter Burn, director of public policy at the Australian Industry Group. “Lower interest rates would assist in reigniting demand for housing and commercial construction.”
New orders slid 0.6 point to 23.9, the lowest level since the series began in 2005, and a gauge of employment fell 2.6 points to 32.3 last month, the report showed. Construction of houses plunged 5.5 points to 24.1 and apartments dropped 4.2 points to 21.
--Editors: Brendan Murray, Benjamin Purvis
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