Crisis hits builders hard

Australia’s building and construction industries have had a tough year, despite the Federal government’s stimulus packages.

Figures just released by the Bureau of Statistics show that these industries suffered a 5.7 per cent downturn in the June quarter -and an 8.5 per cent fall over the year -= on  seasonally adjusted comparisons.

The residential sector suffered a 2.6 per cent fall in the quarter and a 7.6 per cent fall over the year.

The non-residential sector saw a 9.5 per cent fall in the quarter and a 9.8 per cent fall over the year.

The chief economist of the Master Builders Federation, Peter Jones, said the boost the non residential construction sector had received from the government sector had been swamped by a major fall in private sector work.

“Commercial builders are being choked by tough lending criteria imposed by financial institutions,” Mr Jones said.

Softening market conditions are also leaving a significant hole in activity, he said.

The Federal government has tried to boost the non residential building sector with a bold program of school library construction.

That was a prominent part of the second stage of its stimulus package

Mr Jones and the Housing Industry Association’s chief economist, Harley Dale, agree that the housing sector is likely to pick up next year.

Mr Dale warned, though, that home building work is getting bogged down in the approvals stage.

Home building approvals are lagging well behind the present strong surge in lending for new homes.

“That suggests that the new home building recovery will b e very modest to begin with and will not show up in earnest for construction work done until 2010,” Mr Dale said.

The bureau had better news, though, for the engineering construction sector.  It saw a 5.7 per cent rise in the June quarter and a 22.7 per cent rise, in a year on year comparison.  That happened as new resource projects were launched, despite the global economic crisis.