Lower interest rates have slowed the decline of Australia's construction sector, but the industry is expected to remain in a slump into 2013.
The Australian Industry Group (Ai Group) and Housing Industry Association (HIA) Australian Performance of Construction Index rose 1.2 points to 37.0 in November.
A reading below 50 indicates the sector is declining.
The ongoing slump in commercial and housing construction continued to weigh on the sector, Ai Group's director of public policy Peter Burn said.
"Lower interest rates may have helped stem the pace of decline but have not lifted the sector out of the doldrums to date," he said.
The survey also showed a sharp decline in new orders, down 2.5 points to 34.3, which indicated construction would remain weak over the coming months.
HIA chief economist Harley Dale said the figures suggested the slump in the residential construction sector may be bottoming out, but there was no clear evidence of a sustainable recovery emerging in 2013.
"The residential sector and the wider construction industry has a vital role to play in filling the void that will be left by a decline in mining related investment activity," he said.
He called on the federal government to soften its stance on achieving a budget surplus.
"Governments, led at the federal level, need to engage in meaningful taxation reform and other policies that will enhance productivity performance," Mr Dale said.
"The federal government also needs to soften its stance on a move back to surplus at all costs in 2012/13 as this goal is damaging the prospects of a construction recovery and a successful rebalancing of growth in the Australian economy from 2013."
Source: http://www.wabusinessnews.com.au/article/Construction-sector-remains-in-decline
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