The Australian economy is being blamed for dragging down Fletcher Building's half year results.

The country's biggest building firm has seen operating earnings drop $57 million to $224 million.

But Building Industry Federation chief Bruce Kohn says the Australian government's squeezed budget is helping create difficult conditions, but things are booming here.

"There are a number of areas of which they've shown a very strong volume growth and their order book going forward is extremely good at $2 billion in the construction area."