Master Builders Australia - Builder Sentiment Takes A Dive

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28th September 2010, 04:49pm - Views: 1105

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Media Release

28 September 2010


Statement by Peter Jones, Chief Economist

Builder sentiment fell back in the September


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


Master Builders Australia Chief Economist, Peter Jones, said: “Builders are experiencing a renewed

sense of pessimism after the recent pick up in sentiment following the

collapse of confidence that

occurred in the wake of the global financial crisis and economic downturn.”

Mr Jones said, “Builders are becoming increasingly concerned about the outlook as government

stimulus programs begin to wind down.”   

Master Builders’ latest September quarter survey finds that builders expect overall industry activity to

be lower over the next six months relative to the past six months; they are much more circumspect

about their own future business activity; see their profits deteriorating over the next six months in line

with a range of forward indicators; and expect to reduce their workforce in the period ahead 

A number of forward indicators headed south

during the quarter. 

The index for display centre

traffic/enquiries fell back again in the September quarter which does not auger well for future sales

and activity levels.  Builders’ backlog of work fell back in the September quarter, with the weakening

almost certainly in line with the tailing back of government stimulus work.

Mr Jones said, “Builders have now become pessimistic about where the residential sector is headed


the index measuring non-residential building has fallen

back to be now well below the

‘satisfactory’ mark after a welcome boost from government stimulus programs such as the BER.”

“The latest survey shows weaker employment intentions in the September 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 one quarter of respondents surveyed remain concerned that

availability of finance is having a large or constraining effect on their business.  In addition, builders

report that interest rates are impacting on forward orders and believe that rates will continue to rise

over the next 12 months.

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

Bank to keep

interest rates on hold until 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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