Australian construction activity again contracts

Record low Australian interest rates of 2 percent have failed to lift construction activity, with the sector contracting further in June.

The Australian Industry Group and Housing Industry Association' s Performance of Construction Index fell 1.4 points to 46.4 in the month.

"The national construction industry contracted at a steeper rate in June, as weaker engineering activity continued to outweigh expansion in the house and apartment building sectors," Ai Group said on Tuesday.

June's result leaves the index well below 50 points, the level that separates expansion from contraction.

The index has now been below 50 since a one-off bounce in March lifted the reading to 50.1, and has been in contractionary territory in seven of the past eight months.

But apartment building was the strongest performing sector at a three-month high.

"Activity in the house building sector also expanded for the third time in the past four months, but at a more subdued rate than in the apartment sector," Ai Group said.

Meanwhile, engineering construction contracted for a 12th straight month, as the declining mining investment boom saw demand fall. Endi