Media Release
26 August 2009
BIG FALL IN BUILDING WORK DONE AS
CONSTRUCTION STRENGTH BEGINS TO FADE
Statement by Mr Peter Jones, Chief Economist
Construction work done dipped again
in the June quarter
with a sharp decline set to unfold as the
effects of credit crunch and economic downturn
begin to show through,
according to Master
Builders Australia, the peak body for the building and construction industry.
Mr Peter Jones,
Master Builders Australia’s
Chief Economist said, “There will continue to be
substantial fallout from financial constraints and a weak economy on the building and construction
industry.”
“Government stimulus measures will help cushion the blow, but they will not be enough to prevent a
major downturn in construction over the next 12 months.”
“Non-residential building has already suffered a 10 per cent decline with the boost from public
stimulus programs set to be swamped by a major fall in private sector work.”
“Commercial builders are being choked by tough lending criteria imposed by financial institutions
and funding issues and softening market conditions is leaving a significant hole in activity.”
“The pipeline of non-residential work is beginning to dry up, with work-yet-to-be-done declining by
12 per cent in the June quarter.”
“Residential building activity experienced another ratchet down in activity, although conditions will
recover
late this year and into next
as lower interest rates, the first home owner ‘boost’ and social
housing initiatives help drive an upturn.”
“Nonetheless, with the housing sector facing twin hurdles of weak investor activity and the end of the
‘boost’ scheme, dwelling investment is unlikely to significantly contribute to economic growth until
well into 2010.”
“Engineering construction rose in the June quarter and the pipeline of resources-related work yet to
be done and State Government infrastructure spending should cushion the impending fall.”
“The key to the outlook for the construction industry will be whether an upswing in the residential
sector can offset the decline in non-residential building and weaker engineering activity.”
Seasonally adjusted, the chain volume of construction work done in the June quarter
fell by 0.1 per
cent to $35.0
billion
to be
5.4 per cent above levels in June
quarter 2008. The chain volume of
building work done in the June quarter was down by 5.7 per cent to $16.8 billion, to be down 8.5 per
cent on the previous
June
quarter. Work done on
residential building fell
by 2.6
per
cent
to $9.7
billion, to be down 7.6 per cent on the corresponding figure a year earlier. Non-residential building
fell
by 9.5
per cent to $7.1
billion,
to be down 9.8 per cent on
June quarter 2008.
Engineering
construction
work done rose by 5.7 per cent to $18.2 billion to be up 22.7 per cent on
the previous
June quarter level.
Further information contact: Peter Jones, Chief Economist, Ph: Mobile 0403 440 838
NEWS 
