March 7 (Bloomberg) -- A gauge of Australia’s construction industry fell to the lowest level in four months as commercial construction remained weak and house building declined.
The construction performance index fell to 35.6 in February from 39.8 a month earlier, the 21st monthly decline, a survey by the Australian Industry Group and the Housing Industry Association released in Sydney today showed. A reading below 50 represents a contraction.
Reserve Bank of Australia Governor Glenn Stevens and his board paused interest rates for a second month this week, after two cuts late last year, as China and India increase demand for iron ore, coal and liquefied natural gas. In contrast, construction and manufacturing have weakened on signs parts of the economy are buckling and shedding jobs under pressure from the currency.
“The tentative signs of recovery that had emerged in the closing months of 2011 as interest rates were lowered appear to have dissipated since the start of this year,” Australian Industry Group Director of Public Policy Peter Burn said in a statement. “With new orders also weak in February and with market interest rates somewhat higher, the outlook for the next few months remains flat.”
After a rate pause last month, the country’s four biggest lenders -- Commonwealth Bank of Australia, National Australia Bank Ltd., Westpac Banking Corp. and Australia & New Zealand Banking Group Ltd. -- raised mortgage rates, citing higher wholesale funding costs.
Today’s report showed new orders fell 1.7 points to 34.2, while a gauge of employment dropped 6.8 points to 38.5 last month. Construction of houses fell 3.2 points to 37.9, while apartments slid 0.2 point to 34.4, it showed.
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