Construction in Australia fell by its sharpest rate in 12 months during September, an industry study shows.

The Australian Industry Group performance of construction index (PCI), released yesterday, fell to 30.9 in September, from 32.2 the month before. A reading of less than 50 indicates contraction. The sector has been contracting for 28 straight months, with declines in activity, employment and deliveries highlighting weakness.

All major subsectors reported falls in September, with apartment and house building the weakest, at 26 and 28.5 points respectively. New orders rose by one point to 29.1 points - but still showed a 28th month of contraction.

Australian Industry Group chief economist Julie Toth said the overwhelming trend was one of weakness.


"The capital-intensive activity under way at present in mining-related engineering construction work in some states is simply not filling the gap left by the severe national downturn in residential and commercial construction."