Building sector confidence hits six-year high
Things are looking up for the building and construction sector: the Master Builders National Survey of Building and Construction shows that business confidence is higher than it has been in six years.
“The survey for the March quarter 2014, released today, finds that building activity in 2014 is set to continue its rebound on the back of improved confidence in residential building,” said Peter Jones, Master Builders Chief Economist.
“Results for the March quarter show that we are beginning to see signs of the stronger confidence necessary to underpin a sustained recovery. We are seeing key indicators continue to strengthen while others have entered positive territory for the first time in years.”
For the first time in almost three years, the proportion of builders reporting increased sales has topped 20%, the report showed, while builders are reporting improved business profitability.
Confidence in business prospects has risen for the third quarter in a row. This is particularly reflective of the residential building sector’s response to low rates, Jones says, and indicates that business activity is likely to continue to rise over the next six months.
There’s also good news for the commercial construction sector, with the best measure of current conditions since March 2011 reported in the survey.
“The survey highlights the need for the government to foster business confidence through its budget repair strategy in the forthcoming May budget, in particular balancing the need to nurture economic growth and jobs while taking the necessary hard decisions to return the budget to surplus,” Jones said.
NSW saw an 18% increase in dwelling starts for detached houses in the 2013 calendar year. Victoria gained some of its previous strength and WA is continuing to perform strongly, despite the fading of the mining boom, Jones says.
“While the findings of the survey are largely positive, the underlying vulnerability of the building recovery remains. Roadmaps to stronger and sustained business confidence must be the priority of the government in the upcoming federal budget,” Jones said.
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