The latest building activity data confirmed the warning issued last week by the Australian central bank - that the local housing sector will not be geared to recovery mode, at least in the near term.

The performance of construction index (PCI) released on Monday by the Australian Industry Group-Housing Industry Association showed the numbers again shrunk last month by 1.3 points to 34.9, way below the 50-point-mark that indicates contraction in the sector.

The downward trend has been the norm in the past 22 months, the index said, highlighting the fears expressed by the Reserve Bank of Australia (RBA) last week that the housing sector's cherished path to turnaround may not come at all this year.

"It is very clear from the RBA's latest quarterly Statement on Monetary Policy that the bank harbours considerable concern about the persistent weakness in housing construction," Housing Industry Association (HIA) chief economist Harley Dale said in a statement.

"Weak housing construction activity is clearly weighing heavily on the wider domestic economy," Mr Dale added.

The AIG-HIA index pointed to consistently slowing demand and fewer workloads as main factors for the nearly two-year retreat in the sector, with fresh orders in the sub-index falling by 0.9 points to 32.3 in April.

The weakest link in the four major sub-sectors turned out as the apartment building activity, which last month dipped alarmingly at 22.9 points.

Even the latest readings in the sector's best-performing sub, engineering construction, suffered a slim slide in the month, en route to its April level of 40.9 points.

Commercial construction activity fell too in the month at 35.2 points while home building activity contracted anew to end up at 33.3 points, painting a gloomy outlook for the industry, which according to the HIA badly needs federal intervention.

The 50-basis-point cut in the cash rate last week was definitely a good start, Mr Dale said, adding that "further interest rate cuts are necessary and will help."

He stressed that "federal and state government action to remove obstacles to boosting housing supply requires urgent priority."

Also, Australian Industry Group (Ai Group) director of public policy, Peter Burn, said in the report that the RBA's latest policy move "will help counter the existing headwinds while the construction industry will have a close eye on tomorrow's (federal) budget and the impacts it may have on business, household and public sector demand over the year ahead."

"The fall in construction activity in April is further evidence of the widespread nature of the current slowdown in the broader economy," Mr Burn said.

All the indicators showed that the housing sub-sectors were encountering long-standing difficulties, with improvements seem out of sight at the start of current, which lamentably could remain the case for the rest of the year, Mr Burn added.

Another HIA economist, Geordan Murray told the Australian Associated Press (AAP) on Monday that there was a clear "evidence of a persistent weakening in Australia's residential construction industry ... which is continuing unabated in 2012."

Mr Murray conceded that government assistance could prod some form of recovery for the sector.

"Federal and state government support and policy reform is a vital plank in restoring confidence and activity in the residential construction industry interest rate relief cant do all the heavy lifting," he added.