National Survey Of Building And Construction: Milder Downturn.

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13th April 2010, 12:01pm - Views: 538

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Media Release

13 April 2010




Statement by Peter Jones, Chief Economist

The building and construction industry is now showing signs of improvement following a roller-coaster

ride experienced in the wake of the global financial crisis, according to the Master Builders Australia’s

National Survey of Building and Construction.  

Master Builders Australia Chief Economist, Peter

Jones, said: “Own-business activity and profits

continue to trend up, but remain well short of levels achieved prior to the downturn.”  

Mr Jones said, “In the March quarter there was an encouraging pick up in non-residential building as

government stimulus programs began to flow through to work on the ground.”

“However, the sharp rebound in builder sentiment through the middle part of 2009 appears to have

reached a plateau and forward indicators such as sales, traffic and capacity are not yet pointing to a

strong and sustainable recovery in building industry conditions.”

There was little change in builders’ intentions to employ labour, suggesting that workforce levels may

remain fairly steady over the next six months, a much better outcome than was expected a year ago

in the wake of the global financial crisis.

Pressures related to finding skilled labour rose across all categories in the March quarter as builders

once again experience some difficulty finding a range of subcontractors/employees particularly

project managers, site managers and foremen/supervisors. 

The March quarter survey reveals that the impact of the credit squeeze remains an issue for builders.

Although down on recent highs, nearly 30 per cent of respondents reported that the availability of

finance was having a large or constraining effect on their business.  

Mr Jones said, “Commercial and residential builders still struggling with the effects of the credit

crunch now have to factor in higher financing costs.”

“Builders expect further increases

in interest rates and

the survey index measuring the impact of

interest rates on forward orders has risen sharply in the past six months.”

He said, “The timing of the latest rate rise will make it difficult for a private sector housing recovery in

circumstances where investor confidence remains weak.” 

“The investor-driven component of the new housing market is critical in terms of ensuring an

adequate supply of affordable housing that in turn is so important to Australia’s productive capacity.”

“The risk is the Reserve Bank’s interest rate strategy will only exacerbate an already significant under

supply of housing and put further pressure on rising rents which feed into consumer price inflation.”  

“All levels of government need to urgently confront the chronic housing shortage.”  

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

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