Construction weakens for 25th consecutive month: Midday roundup

The local construction industry has now contracted for a 25th consecutive month, according to the latest figures from the Australian Industry Group Performance of Construction Index.

The index was flat at 34.8 in June, under the 50-point level separating expansion from contract.

The result comes despite the Reserve Bank having cut the official interest rate by 1.25 percentage points to 3.5% over the past eight months.

Construction activity fell to its lowest level in 2009.

“The residential and commercial construction sub-sectors continue to be a drag on overall business activity with lack of demand and access to finance both holding these important sub-sectors back,” Australian Industry Group director of public housing Peter Burn said in a statement.

Housing Industry Association economist Harley Dale said the result once again warrants more input from governments.

“That is a concerning update on Australia’s economic prospects and policy-makers should heed this clear signal for policy action.”

Fairfax shares drop 3% after Rinehart sale

Fairfax shares have fallen 3% this morning after Gina Rinehart downgraded her stake to below 15%.

The move comes amid a battle between Rinehart and the publisher’s board over her effort to gain three seats.

Rinehart remains the company’s largest shareholder, but previously warned she would sell her shares if chairman Roger Corbett did not implement strategies to reduce declines in readership and circulation.

Shares have hit as low as 56 cents this morning, and at 12.00 were trading at 57 cents.

Automotive Holdings acquires Toll fridge business

Automotive Holdings has acquired the interstate refrigerated business of Toll Holdings, its main national rival.

According to Automotive Holdings, the purchase (which doesn’t include Toll’s cold-storage facilities in Sydney, Brisbane and Perth) delivers $75m in annual revenues and will be earnings per share positive from day one.

Toll says the business, which doesn’t rate as a line item given Toll’s $8 billon of annual revenues, made a small loss in the year to June 30, 2012.

Market opens lower due to overseas concern

The local sharemarket opened softer after the US market fell overnight amid concerns about low US consumer spending data and slowed economic growth in China.

Analysts predict today’s trading will be low-volume, with investors cautious.

The benchmark S&P/ASX200 index was down 19.2 points or 0.46% at 11.30 AEST, with the Australian dollar down marginally, at $US1.0266.

In the United States, the Dow Jones Industrial Average lost 47.15 points or 0.36% overnight, to 12,896.6.