According to the latest results from the Australian Industry Group-Housing Industry Association Performance of Construction Index, the Australian construction industry has expanded, but at a low rate. It fell 4.9 points to 52.8 last month. But it was still greater than the key 50 point level which separates expansion from contraction.

The house building, engineering and commercial construction sectors all witnessed expansion but at a slow speed. HIA economist Ben Phillips shared that the housing sector is trying to recuperate.

He says, "The sustainability of that recovery will be tested later in 2010 as social housing and first home buyer activity declines and interest rates increase".

AIG Director of Public Policy Peter Burn said that the result is better than last year.

He said, "The survey points to housing activity holding up over coming months with firms reporting a further improvement in their order books and the emerging signs of an increase in investor activity... The key concern is that higher interest rates and, in particular, the clear risk of further increases, will pull back growth in coming months".

The reason behind the slow speed of development is lesser new contracts and all the existing work being on the verge of completion.