Australia’s building industry shrank in August for a third straight month, a sign the central bank’s six interest rate increases between October and May are eroding demand for new dwellings.
The index was little changed at 43.2 points from 43.3 in July, according to a survey by the Australian Industry Group and Housing Industry Association released in Sydney today. A reading below 50 shows the industry is contracting.
Australia’s central bank will keep borrowing costs unchanged today for a fourth straight month to help cushion the economy against any fallout from slowing global growth, according to a Bloomberg News survey of economists. While demand for houses fell in August at a faster pace, the decline in commercial and engineering construction slowed, today’s report showed.
“The construction sector is yet to bounce back from a distinct decline in performance since May,” said Peter Burn, director of public policy at the Australian Industry Group.
A gauge of engineering work rose 4.1 points to 40.3 in August and commercial work gained 7.6 points to 42.9, today’s report showed. House building fell 0.5 points to 38.4.