It has been reported that the construction sector grew for the fourth month in a row in May, but the growth rate was slow.

The Australian Industry Group/Housing Industry Association said that the interest rates have been increased by the Reserve Bank of Australia's within eight months resulting in huge expenditure in the sector.

The latest seasonally adjusted Australian Industry Group/Housing Industry Association Performance of Construction Index was 53.2 in May, down 2.6 points but still above the 50 point level indicating an expansion in activity.

Housing Industry Association Senior Economist, Ben Philips said that the sector's expansion was driven by the Government's fiscal stimulus flowing through to home building, but commercial building remains weak.

Australian Industry Group Director Public Policy, Dr. Peter Burn viewed the overall result and considered the housing sector to be fragile and subject to external risks, particularly around the cost of credit.

"The continued expansion of the construction sector as a whole and the ongoing growth of new orders in housing, engineering construction and commercial construction are positive signs that the recovery in the sector is gaining traction following the difficulties of the past couple of years", said Peter Burn.

However, the continued strength for home building activity is positive for the industry.