Latest research from Master Builders Australia (MBA) shows a decline of 3.3 percent in residential building activity since September of last year.
The results of the most recent Master Builders Australia’s National Survey of Building and Construction show builders are feeling the chill from the weaker conditions now facing the industry, says MBA Chief Economist Shane Garrett.
“According to the MBA National Survey of Building and Construction report, the MBA Index of Residential Building Activity declined to 51.7 from 55.0 last September, signifying weaker conditions. A result of greater than 50.0 still counts as positive, but the margin is now wafer thin. At 53.4, the result for non-residential building was a little better but has also declined since late last year,” he says.
“In terms of residential building, official figures over recent months have painted a glum picture of the market environment. Our survey results confirm that ordinary homebuilders across Australia are feeling the pinch. In particular, tight credit conditions are disrupting cash flow in small building firms and holding back potential customers. Overall, residential builders are pessimistic as regards short-term prospects,” Garrett says.
“Things are a little better for commercial builders. Current market conditions are perceived as being mildly favourable and commercial builders are guardedly optimistic about how they’ll fare over the next six months or so. Strong population growth and large gains in employment justify the building of new schools, hospitals, offices and shops,” he says.
“While the effects of the banking Royal Commission were viewed negatively by builders, April’s federal budget got the thumbs up with its raft of measures around infrastructure delivery, small business tax breaks and support for apprenticeships,” says Garrett.
“Speeding up the pace at which these infrastructure projects commence work on the ground will offer the industry a tangible and visible boost and help drag activity back in the right direction,” he says.
Image: Scott Blake