Builders are bouncing back as a result of the government’s fiscal stimulus package, according to new research by Master Builders Australia.
The quarterly National Survey of Building and Construction reveals that expectations for building industry activity recovered in the June quarter after the massive fall in sentiment experienced over the past six to 12 months.
The government’s policy strategy to leverage the building and construction industry is “bearing fruit”, MBA chief economist, Peter Jones, said.
“The more optimistic outlook by builders in the June quarter comes as government economic stimulus measures such as the schools program and social housing initiatives begin to kick in,” Jones said.
Builders believe the recent federal budget will be positive for their business and are less fearful of the negative impact from the global financial crisis, he said.
But, despite the more optimistic outlook by builders, the June quarter survey points to a volatile period ahead. The index, at 43.6, remains below the neutral 50 mark, indicating that builders still expect industry activity to deteriorate over the next six months.
A similar pattern emerged in relation to survey results for own business conditions, profits, investment and number of full-time employees.
The proportion of builders expecting a reduction in business activity as a result of the global financial crisis fell from 80 per cent to 60 per cent in the June quarter.
Nonetheless, of those expecting an impact, more than half expect their own business activity to fall by more than 20 per cent over the next 12 months.
Similarly, in the face of the looming downturn, 60 per cent expect staffing/sub-contract numbers to fall by up to 5 per cent, with 40 per cent anticipating employment numbers to fall by more than 5 per cent.
“Key forward indicators in the residential sector are providing some encouragement, although it will take time for activity to turn around, particularly as the extended first home owner boost is set to halve from end September before ceasing at the end of the year,” Jones said.
This comes as premier Nathan Rees has announced 190 new building firms have been recruited to help build around 9,500 new social housing homes over the next three years.
Rees said that the NSW government is working in partnership with the Commonwealth Government to deliver on this massive investment as part of the Nation Building Economic Stimulus Plan.
“In this tough economic climate, supporting jobs is the number one priority for all levels of government across the country.
“Because of the scale of this program we need a small army of builders, architects, carpenters, brickies, plumbers, surveyors, engineers and landscapers to help us build these homes.
“We need to move quickly — 75 per cent of the properties that the commonwealth is funding as part of their Nation Building Economic Stimulus Plan need to be ready for tenants to move in by Dec 2010.
The state has expanded its register from 51 building firms to 241 after receiving a large amount of applications from building firms keen to be involved in “the avalanche” of new home construction, Rees said.
