MYEFO Confirms Poor Outlook for Builders
The Government’s Mid-Year Economic and Fiscal Outlook (MYEFO) confirms Master Builder’s own projections for a tough year ahead for builders, particularly in the commercial construction sector.
Released today by the Federal Treasurer Wayne Swan, MYEFO projects continued poor conditions for the non-residential building sector, while a recovery for the housing sector is not predicted until the new financial year.
Chief Executive Officer of Master Builders Australia, Wilhelm Harnisch, said the MYEFO report unfortunately points to a domestic economy where the building and construction will not feature large.
“Master Builders’ forecasts and member surveys have shown that conditions in the industry have been at very low levels for some time.
“The muted recovery in residential building predicted for the new financial year is cold comfort for builders and contractors. Commercial construction remains in the doldrums and forward activity is low, meaning more jobs are under threat in the sector. A reduction in payments to employers of apprentices over 25 years creates a substantial disincentive and is a backwards step in Government employment policy.
“Master Builders September quarter survey of more than 500 builders and contractors suggests businesses are expecting to reduce their workforce to try and stay solvent. It backs up Australian Bureau of Statistics data showing construction employment fell by 70,000 in the year to August.
“Meanwhile, the residential building industry is putting all its hopes on state government stimulus measures in New South Wales, Queensland and South Australia to boost activity in the forecast period.
“It confirms the Reserve Bank’s decision to cut interest rates by more than 1.25 per cent over the past year. The RBA must be prepared to continue to cut rates and banks must pass them on in full, to help stimulate the industry,” Mr Harnisch said.