Australian Bureau of Statistic (ABS) figures released yesterday showed building and construction work rose modestly overall in the June quarter.
But there is a growing divide between building and mining-related engineering construction, Master Builders Australia has pointed out.
While the Housing Industry Association said it was a disappointing update for new housing activity in the June 2011 quarter.
Peter Jones, Master Builders Australia's chief economist said, "The latest figures show parts of the industry struggling, confirming evidence from Master Builders' latest survey showing a dramatic turnaround in builder sentiment as commercial and residential building-related stimulus spending programs come to an end."
"The business environment has become much tougher in recent times, not helped by uncertainty regarding the world economy and share market volatility."
Jones said the Abs figures shows that work in the pipeline for the non-residential sector continues to fall, with builders also facing a downturn in forward indicators such as sales and enquiries as evidenced by our surveys.
"After promising so much, residential building is struggling to regain lost momentum triggered by last year's interest rate rises and the ongoing credit squeeze that continues to suppress the upturn,” he said.
"There was another strong increase in engineering construction in the quarter as projects ramp up from the huge pipeline of resources-related work, particularly in Western Australia and Queensland.
"In contrast to the positive outlook for engineering construction, the residential building upswing faces ongoing challenges and the non-residential building sector is desperate for a pick up in private sector demand to replace ebbing stimulus-related work.
"For the building and construction industry overall, a sectoral divide is opening up, with strong engineering construction fed by the mining boom contrasting with a weak building sector caught in the slow lane of a post GFC economy struggling to transition to a private sector led recovery."
The Housing Industry Association said it was a disappointing update for new housing activity in the June 2011 quarter.
HIA chief economist, Dr Harley Dale, said that seasonally adjusted residential building work done fell by 4.1 per cent to an annualised level of $45.4 billion in the June 2011 quarter.
"New residential building work done fell by 5.4 per cent reflecting a 1.8 per cent decline in detached housing and a slump of 11.9 per cent in "Other dwellings"," Dale said.
"This result suggests that new dwelling investment will detract from GDP growth in the June quarter national accounts due for release in two week’s time."
Major renovations (alterations and additions) activity posted a healthy 3.4 per cent rise in the June 2011 quarter, marking the third consecutive increase. The annualised worth of work done on renovations was almost $7.2 billion, the highest in nearly three years.
"Major renovations activity continues to grow as Australians increasingly baulk at the mounting transaction costs and taxes they will incur if they trade-up to another property or build a new home," said Dale.
"Substantial reform of the very high and inefficient taxation of new housing in Australia will be a vital part of being able to call the Tax Forum in October a success.”
In the June 2011 quarter, seasonally adjusted new residential building work done fell by 13.0 per cent in New South Wales, 9.7 per cent in Western Australia, 7.0 per cent in the Australian Capital Territory, 6.6 per cent in Queensland, 0.3 per cent in Victoria, and 0.2 per cent in Tasmania.
New residential building work done increased by 7.9 per cent in South Australia.
In original terms new residential building work done in the Northern Territory in the June 2011 quarter was down by 38 per cent when compared to the June quarter of last year.
