The construction sector took another hit in the first three months of 2013, even with interest rates close to record lows.
The amount of construction work done fell two per cent in the March quarter, according to figures released by the Australian Bureau of Statistics (ABS).
The value of work done in the engineering construction sector fell 2.5 per cent, residential building decreased 1.0 per cent and the non-residential building fell 1.2 per cent.
Wilhelm Harnisch, Chief Executive Officer of Master Builders Australia believes the most worrying aspect of the statistics is the drop in new housing activity, with the March quarter fall in activity across all three sectors reflecting a growing caution and uncertainty about the economy.
"Regrettably, uncertainty and caution is widespread throughout the industry and the broader economy,” said Mr Harnisch.
"Feedback from builders and contractors is that new home buyers and clients are putting their decisions on hold until after the Election in September.”
"The March quarter construction work done figures justifies the Reserve Bank's decision to cut interest rates to record lows in May.”
"The building industry remains hopeful that the impact of Reserve Bank interest rate cuts will help the fledgling the housing recovery over the next few months.”
Earlier in May, Master Builders forecast a mixed recovery for the building and construction industry over the next three years. This was underpinned by the assumption that interest rate cuts and government policy would improve consumer and investor confidence and stimulate activity.
"The Reserve Bank continues to do the heavy lifting trying to stimulate confidence in the economy. Government policies must also be in place to complement interest rate cuts, otherwise the size and strength of the industry's recovery is at risk," Mr Harnisch said.
