Construction industry expands at slower pace

SYDNEY: Activity in the construction industry expanded for a second month in February, although at a slower pace due to a drop in building flats, a survey says.

The Australian Industry (Ai) Group/Housing Industry Association (HIA) Performance of Construction Index fell 4.9 points to 52.8 in February.

It was the second consecutive month the index was above the 50 level separating expansion from contraction in activity.

The report said activity in the sectors of house building, engineering and commercial construction all expanded at a slower rate in February while apartment building slumped to contract during the month.

AI Group director of public policy Peter Burn said the survey supported the improvement in the construction sector since hitting a low 12 months ago.

"The house building sector, in particular, experienced solid conditions, in line with official data showing a continued increase in approvals for detached houses," Burn said.

"The key concern is that higher interest rates and, in particular, the clear risk of further increases, will pull back growth in coming months."

- AAP