Australian construction sector activity posted its strongest result in almost three years, helped by strong results in housing and engineering
The Australian Industry Group (Ai Group) and Housing Industry Association's (HIA) performance of construction index (PCI) rose by 9.4 points to an index level of 45.6 in February.
It was the industry's 33rd consecutive monthly decline in activity, but the slowest rate of decline since June 2010.
An index level below 50 indicates the sector contracted during the month.
HIA senior economist Shane Garrett said housing activity posted its first rise in activity since May 2010.
"The strong rebound in house building activity captured in the figures adds evidence to the prospect of a modest recovery in this area," he said.
"The nature of the housing recovery is, nonetheless, tentative and the overall weakness of construction activity merits further intervention from the Reserve Bank of Australia (RBA) in the form of interest rate reductions."
The RBA cut the cash rate a total of 1.75 percentage points between November 2011 and December 2012, bringing it to its current level of 3.0 per cent.
However, Ai Group director of public policy Peter Burn said conditions still were not favourable for the construction sector.
"Tight credit conditions, lack of investor confidence and low levels of public sector demand are proving substantial barriers to recovery in the commercial construction sub-sector which contracted even further in February," he said.The engineering subsector reported a rise in activity in February, apartments building activity fell at a slower rate and commercial construction fell faster.
The new magazine for a new generation of West Australians.Click here to download »
All the latest market figures from Australia and the world.Click here »
'The West Australian' is a trademark of West Australian Newspapers Limited 2013.
All rights reserved.
Select your state to see news for your area.