Construction activity continued to fall in February as an interest rate cut failed to encourage new orders.

Australia’s building sector shrank for the fourth month in a row even through the Reserve Bank cut the cash rate to a new record low of 2.25 per cent.

Building activity levels fell two points to 43.9, which is well below the 50 level separating growth from decline as new orders tumbled, the Australian Industry Group-Housing Industry Association (HIA) barometer showed.

Apartment building was strong, posting the best reading since November last year, but detached housing activity fell for the third straight month.

Engineering construction declined, with the worst reading in nine months as resource industry projects were scaled back, while commercial building activity also weakened.

“While house building is retreating from relatively healthy levels, it is no longer offsetting the well-entrenched decline in mining-related engineering construction activity,” Ai Group director of policy Peter Burn said.

HIA chief economist Harley Dale said residential construction was still relatively strong, despite the easing of house building.

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AAP

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