Media Release
22 September 2009
GOVERNMENT STIMULUS UNDERPINS CONFIDENCE AND
CONSTRUCTION ACTIVITY
Statement by Peter Jones, Chief Economist
The Government
stimulus
package continues to underpin confidence and construction activity
according to the results of Master Builders Australia’s National Survey of Building and Construction
for the September quarter 2009.
Master Builders Australia Chief Economist, Peter Jones, said: “The Government’s policy strategy to
leverage the building and construction industry to help cushion the economy from the effects of the
global financial crisis is having the desired effect of stimulating the economy and protecting jobs.”
“Government stimulus measures, particularly the schools program and social housing initiatives, are
driving a recovery in sentiment after
the plunge in builder confidence experienced in late 2008 and
first part of 2009.”
Mr Jones said, “The stimulus package, combined with a backlog of work - albeit reducing - and low
interest rates are preventing a collapse in construction activity despite twin challenges of reduced
credit availability and weaker economic conditions.”
“The credit squeeze and economic slowdown
led to a massive fall in non-residential building
approvals
that is now beginning to translate into falling
construction output and employment, but
which is being mitigated by the Government’s well targeted stimulus measures.”
This is evidenced by survey results revealing
that builders’ own business conditions continued to
recover in the September quarter 2009,
though remaining well short of levels achieved prior to the
onset of the global financial crisis.
“Despite a
pick up in operating conditions and greater optimism
about the outlook, the industry still
faces major stumbling blocks and the likelihood of a volatile period ahead.”
Master Builders predicts a fall in construction output of between10 and 15 per cent over the course of
2009/10 and 2010/11, with employment likely to fall by 7 to 10 per cent over the same period. The
building and construction industry lost nearly 10,000 jobs in the 3 months to August, to be down by
nearly 30,000 or 3 per cent from a peak level of 995,000 achieved last year.
“The Government’s stimulus measures will help maintain up to 50,000 jobs in non-residential building
that would otherwise have been lost, ensuring the trough in total construction employment is closer to
925,000 than the predicted 875,000 without the stimulus programmes.”
The residential building sector outlook remains positive on balance, with key forward indicators
providing some encouragement, but it will take some time for activity to turn around and for a full-on
recovery to become evident, particularly as the first home owners boost scheme phases out.”
“Although residential builders are becoming more optimistic about where activity is headed, the
challenge will be to overcome sluggish investor activity and the prospect of higher interest rates.”
The full report is available at
For further information, contact:
Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
