The national construction industry has contracted for the 21st consecutive month, according to latest industry data.

The Australian Industry Group Australian Performance of Construction Index (Australian PCI) in conjunction with the Housing Industry Association was 4.2 points weaker at 35.6 in the month (readings below 50 indicate a contraction in activity).

The weakness in activity was spread across the sub-sectors. Commercial construction was particularly subdued amid a scaling back in public building work while house building declined at a more pronounced rate than the previous month. 

Also, new orders on aggregate continued to decline with the sub-index falling 1.7 points to 34.2. 

Australian Industry Group Director Public Policy, Peter Burn, said: "The difficulties for the construction industry continued in February with declines in activity in each of the four sub-sectors. The tentative signs of recovery that had emerged in the closing months of 2011 as interest rates were lowered, appear to have dissipated since the start of this year.  With new orders also weak in February and with market interest rates now somewhat higher, the outlook for the next few months remains flat particularly for commercial and residential construction," Dr Burn said.