There has been a turnaround in builder sentiment as the industry loses the cushioning effect of government stimulus programs, Master Builders Australia says is clear from its June quarter 2011 national survey.
Master Builders Australia Chief Economist, Peter Jones, said: "Master Builders' latest national survey for the June quarter highlights the tough business environment that builders are now facing."
"Builders are becoming increasingly concerned about whether there will be a revival in private sector demand in time to fill the gap being left as Building the Education Revolution, Social Housing and other government stimulus programs are completed."
"There is increasing anecdotal evidence that uncertainty created by the proposed carbon tax is also weighing on sentiment."
The June quarter national survey reveals that:
* Builders expect building industry activity to fall over the next six months.
* Builders' own-business activity fell in the June quarter.
* Builders' profitability fell in the June quarter.
* Expectations for profits fell.
* Sales contacts were worse than expected.
* Display centre traffic and enquiries declined.
Jones said, "The survey shows work on builders' books holding up reasonably well in the June quarter, but it remains to be seen for how long this can continue given the winding down of stimulus projects and a less than positive outlook for new work."
"Financial constraints still bedevil the building and construction industry, despite evidence of some easing in the latest figures."
In the June quarter, 26.6 per cent of respondents were concerned that availability of finance was having a large or major constraining effect on their businesses - some improvement, but vastly different from more normal readings closer to five per cent before the GFC.
Jones said, "Interest rate speculation continues to hang over the industry, with the risk of heavy-handed interest rate policy still a real threat to all sectors of building and construction."
"With large parts of the building and construction industry doing it tough, the Reserve Bank should keep interest rates on hold until a private sector recovery is able to gain momentum."
The full report is available at www.masterbuilders.com.au
