The Housing Institute of Australia (HIA) is calling on the federal government to introduce a much-needed stimulus in order to give the residential construction sector a push forward.
Preliminary Australian Bureau of Statistics (ABS) figures released yesterday indicate that residential construction activity improved modestly in the September quarter of 2012, with work ticking up by 0.6 per cent over the quarter.
But despite the slight increase, HIA economist Geordan Murray believes there is still a long way to go.
“September still looks like being one of the weakest quarterly results in the last decade, which highlights the length of the road back – the total volume of work done over the 12 months to September 2012 was 5.7 per cent lower than the same period in 2011,” he said.
“HIA has long held the view that the second half of 2012 is likely to represent a low point for residential building activity in the current cycle and there are tentative signs of this being the case.
“With that said, we had hoped by this time in 2012 to see a more balanced use of federally-led fiscal reform, planning reform, and monetary policy to set the platform for a residential construction recovery in 2013. To date, monetary policy has been the primary macroeconomic tool in play, and it looks like this situation will persist. It is time to see federal and state government action occur to a substantially larger extent than is currently evident.
“On the monetary policy front, if the Reserve Bank are looking to residential construction to contribute to economic growth in 2013, today’s result provides a [compelling reason] to cut the cash rate again at next Tuesday’s board meeting and brighten the prospects of a decent recovery emerging.”
In the September 2012 quarter, new residential building work done improved by 0.9 per cent.
Underlying this result was a lift in the volume of work on new detached dwellings by 0.5 per cent, as well as a lift in the volume of work done on new multi-unit dwellings by 1.9 per cent.