Media Release
25 November 2009
GOVERNMENT STIMULUS SPENDING
SUPPORTS CONSTRUCTION
Statement by Mr Peter Jones, Chief Economist
Construction work done rose
in the September quarter, boosted by government stimulus spending
which is mitigating the effects of the credit crunch and economic downturn,
according to Master
Builders Australia, the peak body for the building and construction industry.
Mr Peter Jones,
Master Builders Australia’s
Chief Economist said, “Government programs such as
building the education revolution
and the social housing initiative are beginning to kick in,
cushioning building and construction from
the fallout associated with financial constraints and a
weak economy.”
“Government stimulus measures are certainly working to help cushion the blow, but they will not be
enough to prevent a downturn in construction over the next 12 months.”
“A public private divide is opening up, with construction for the private sector, particularly non-
residential building, well down on levels achieved a
year ago
as commercial builders suffer the
effects of tough lending criteria imposed by financial institutions.”
“The industry
is playing a vital role in the Government’s countercyclical fiscal policy and
construction for the public sector was up a massive 17.6 per cent in the September quarter and by
nearly 40 per cent through the year.”
“Residential building activity
is beginning to show signs of recovery as lower interest rates, the first
home owner ‘boost’ and social housing initiatives help drive an upturn.”
“Weak investor activity,
the end of the ‘boost’ scheme,
and
higher interest rates
mean dwelling
investment is unlikely to significantly contribute to economic growth until well into 2010.”
“Engineering construction rose in the September
quarter and the
pipeline of
resources-related work
yet to be done and 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 September
quarter
rose
by
2.2 per cent to $39.6 billion
to be 6.9 per cent above levels in September quarter 2008. The chain
volume of building work done in the September quarter rose by 2.6 per cent to $18.7 billion,
to be
down 4.0 per cent on the previous September quarter. Work done on residential building rose by 2.8
per cent to $10.6 billion, to be down 5.0 per cent on
the corresponding figure a year earlier. Non-
residential building rose by 2.3 per cent to $8.1 billion, to be down 2.6 per cent on September quarter
2008. Engineering construction work done rose by 1.8 per cent to $21.0 billion to be up 18.9 per cent
on the previous September quarter level.
Further information contact: Peter Jones, Chief Economist, Ph: Mobile 0403 440 838
NEWS 
