Builders look to Budget for confidence boost outside Sydney and Melbourne
A new report by Master Builders that focuses on the importance of non-mining investment to rebalance the economy like housing and the building industry, has shown that builders across Australia are looking to tomorrow’s Budget announcement to lift business confidence and drive the building industry.
The National Survey of Building & Construction indicated that over the March quarter there was a slump in building activity for building firms and stated that the 2015 Budget must be about “rebooting confidence as conditions elsewhere in the economy have the potential to drag down building and construction.”
The report recognised that the housing industry in Sydney and Melbourne is performing strongly, however said other east coast pockets and lack of confidence elsewhere in the economy is of deep concern and has the potential to act as a drag.
“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,” Peter Jones Chief, Economist of Master Builders Australia said.
While the Reserve Bank of Australia reduced the official cash rate from 2.25% to a record low 2% at last week’s board meeting, the report suggested more needed to be done to lift business confidence and indicated the Budget policy could push a recovery in the commercial construction sector.
“Business remains extremely reluctant to invest. Despite signs of recovery, commercial building continues to suffer the effects of weak non-mining business investment despite low interest rates,” Jones explained.
The study also showed that the commercial construction sector heavily complements the housing industry and helps to boost growth and jobs in the economy.
“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.