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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