The latest building and construction industry survey shows the importance of Tuesday’s Federal Budget in rebooting confidence.
“Master Builders National Survey of Building & Construction recorded a fall in business conditions for building firms in the March quarter,” Peter Jones Chief, Economist of Master Builders Australia said.
“Tackling the longer term structural budget challenge is vital, but so too is the viability of business in the here and now,” he said.
“Housing has been one of the few industries generating the non-mining investment needed to rebalance the economy, but confidence must also take root in the wider economy and community,” Peter Jones said.
“This is particularly important so that the commercial construction sector can complement the housing industry in further boosting growth and jobs in the economy,” he said.
“Builders experienced a fall back in building activity and confidence in the March quarter and this was reflected in a softening of hiring intentions as the index measuring builder’s intention to employ more tradespeople and apprentices declined from the more optimistic outlook recorded in the December quarter 2014,” Peter Jones said.
“A reboot in confidence is fundamental to nurturing the green shoots of sustained activity in the commercial construction sector which is struggling to recover to pre GFC levels,” he said.
“While the housing industry is booming in Sydney and performing strongly in Melbourne and other east coast pockets, lack of confidence elsewhere in the economy is of deep concern and has the potential to act as a drag,” Peter Jones said.
“Builders in other states and territories and in regional Australia are looking to the Federal Budget to underpin a boost in confidence outside Sydney and Melbourne,” he said.
“While the latest rate cut will be beneficial, the Reserve Bank can only pull the monetary policy lever and the Government must now use the Budget fiscal policy levers to push along a sustained recovery in the commercial construction sector,” Peter Jones said.