National survey of builders points to signs of improvement
AMASTER Builders survey of building and construction shows industry sentiment holding up, despite a recent deterioration in some of the leading indicators.
“Industry sentiment showed signs of improvement in the September quarter issue of Master Builders quarterly National Survey of Building and Construction. Builder confidence remained on firm ground, gaining 0.7 points on the Master Builders Building and Construction Market Index (BCMI), supported by a bounce in sales contracts and a loosening of skills shortage constraints,” said Matthew Pollock, National Manager Housing.
“By sector, house builders for detached housing were the most positive, particularly in New South Wales, Victoria and Queensland where strong population growth continues to support a healthy pipeline of work-on-the-books. These results show that while activity in inner-city apartment markets may drop off over the next two years, broader industry sentiment remains positive,” he said.
“Sentiment here is supported by ABS statistics which show residential construction work holding up - up by 1.2% in the June quarter 2016 to be 6.6% up on over the year,” Mr Pollock said.
“But areas of vulnerability remain,” he warned.
“Non-residential builders have lowered profit expectations and nonresidential work-on-the-books is soft. Typically, these are good leading indicators for industry prospects, with the current results pointing to a slower period for the nation’s nonresidential builders,” he said.
“The CBD office markets in Perth and Brisbane remain a lingering weight on broader sectoral business conditions as the resource boom hangover continues to cast a long shadow. Other pockets of vulnerability include inner-city apartment markets, and pretty much the entire engineering construction sector.
“In terms of employment, the survey shows labour availability has loosened across the board, with all construction related occupations covered in the Survey showing index values of below 50.
“The loosening of labour market conditions is good news as long as building activity holds steady, but less positive prospects going forward may pose a risk to employment. Jobs may be at risk if building activity was to deteriorate beyond current market expectations,” he said.