Builders’ own activity and expectations for industry activity both fell back in the December quarter but Government stimulus spending continues to cushion the downturn, according to the results of Master Builders Australia’s National Survey of Building and Construction.
Master Builders Australia Chief Economist, Peter Jones, said: “Despite twin challenges of reduced credit availability and weaker economic conditions, the Government’s stimulus spending and low interest rates are preventing a collapse in construction activity.”
Mr Jones said, “Thanks to the Government’s well-targeted stimulus measures, the building and construction industry has stabilised after threatening to nose-dive early in 2009.”
“What remains to be seen is whether the rebound in building confidence from the depths of pessimism experienced at the height of the global financial crisis actually translates into improved business conditions.”
He said, “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.”
“Although pockets of the building and construction industry are doing well, particularly those exposed to government stimulus spending, most other sectors are ‘doing it tough’.”
“To ensure the building and construction industry continues to help insulate the economy from the effects of the global financial crisis it is crucial that fiscal and monetary policy settings encourage productive investment and job creation.”
“Spending on the schools program and social housing initiative are helping to offset industry weakness, particularly in non-residential building and construction.”
“Residential builders remain positive about the outlook, with key forward indicators providing some encouragement, although the ending of the first home owners boost scheme and sluggish investor activity mean that it will be some time before a fully-fledged recovery becomes evident.”
“Australia needs a strong phase of house building to prevent strong demand simply translating into higher prices.”
“A strong supply response will be thwarted and housing affordability will once again become a front page story unless all levels of government urgently rethink land availability and developer charges policies.”
The full report is available at Master Builders Australia www.masterbuilders.com.au