Builders Becoming Less Confident As Stimulus Pipeline Begins To Taper

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8th July 2010, 11:54am - Views: 549





Industry Construction Master Builders Australia 1 image

Industry Construction Master Builders Australia 2 image

Media Release




8 July 2010


BUILDERS BECOMING LESS CONFIDENT AS

STIMULUS PIPELINE BEGINS TO TAPER

Statement by Peter Jones, Chief Economist

Builder sentiment fell back in the June quarter corresponding with declining expectations for building

industry activity and raising concerns over future economic and employment prospects, according to

Master Builders Australia on the release of its latest National Survey of Building and Construction.

Master Builders Australia Chief Economist, Peter Jones, said: “A

solid pick up in builder sentiment

experienced in recent times following the

collapse of confidence in the wake of the global financial

crisis and economic downturn, appears to have stalled.”

Mr Jones said, “Builders are becoming increasingly concerned about the sustainability of recovery as

government stimulus programs begin to wind down.”   

Master Builders’ latest June quarter survey shows builders’ own-business activity and profits fell in

the June quarter and despite recovery from last years’ trough, most indicators remain well short of

levels achieved prior to the downturn.  

The sharp rebound in builder sentiment seen in the second half of 2009 has reached a plateau

and

forward indicators such as sales, enquiries

and capacity utilisation are not yet pointing to the

likelihood of any strong and sustainable recovery in building industry conditions. 

Mr Jones said, “Builders are now less enthusiastic about prospects for a strong upturn in the

residential sector

and

non-residential building has fallen

back after the welcome

boost from

government stimulus programs such as the BER.”

He said, “Although jobs losses have been less than

was expected at the height of uncertainty

associated with the global financial crisis, the latest survey reveals builders are not likely to

boost

their workforces this year.”

“The latest survey shows weaker employment intentions

in the June quarter, with businesses now

likely to cut back on employees and sub-contractors over the next six months.”

He said, “Financial constraints remain an issue for commercial and residential builders alike.”

Although down from recent highs, nearly 30 per cent of respondents surveyed are

concerned that

availability of finance is

having a large or constraining effect on their business.  Builders expect

further rises in interest rates and the index measuring the impact of interest rates on forward orders

has risen sharply in the past six months.

Mr Jones said, “Based on the survey results, Master Builders urges the Reserve Bank to keep

interest rates on hold for an extended period so that a private sector recovery in the building industry

can regain momentum.” 



For further information contact: Peter Jones, Chief Economist, Mobile 0403 440 838

 






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