Subdued demand and tight credit conditions have seen the construction industry contract for the 22nd consecutive month.
The Australian Industry Group - HIA Performance of Construction Index has found the national construction industry remained in a state of decline for March. Though the pace of decline eased somewhat, residential construction saw its steepest fall since September last year.
"There is an unequivocal deterioration underway in the non-resource domestic economy in 2012. As a bellwether industry, residential construction is clearly highlighting this fact with the rate of decline in the detached house and apartment sub-indices of the Australian PCI accelerating in March," HIA chief economist Harley Dale said.
New housing orders also fell in March, reaching their lowest level in six months. Dale called for drastic action from the Reserve Bank in light of the results.
"It was time to act some time ago, but nothing has happened. A 50bp cut in interest rates is required in May, while Federal and state governments need to get on with the job of boosting new housing supply," Dale said.