New housing weakening
BUILDING activity slowed noticeably in the December quarter, placing further pressure on the Reserve Bank to cut the cash rate.
The Australian Bureau of Statistics building activity figures, released on Wednesday, showed a weakening for both new housing and major alterations and additions activity.
New residential building activity fell by 1.7 per cent, seasonally adjusted, while alterations and additions to residential building fell 2.1%, but activity in this field was up 2% year on year.
The total value of work completed in the quarter dipped 4.9%, seasonally adjusted, and 9.1% for the year to December.
Housing Industry Association chief economist Dr Harley Dale said the "persistent weakness in Australia's residential construction industry" was a major concern.
"The situation is very clear - interest rates are too high, the short term focus on a return to budget surplus miss-timed, and housing policy reform too slow," he said.
The Reserve Bank will next meet on May 1 - a week before the Federal Budget is delivered - with a cut to the cash rate, which sits at 4.25%, widely tipped.
"In the December 2011 quarter seasonally adjusted residential building work ... fell for a third consecutive period," Dr Dale said.
"Evidence over 2012 to date confirms further weakness this year."
