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House Builders Feel the Sector’s Slowdown
08/18/2010

The Australian Industry Group/Housing Industry Association Performance of Construction scale dropped 3 point 1 points to 43.3 in July. A reading below 50 indicates a shortening in construction activity.

Peter Burn, Australian Industry Group Director of public policy, the recent survey showed that the construction activities, which begun to fall in April, had continued to turn down even more.

”We’re taking this seriously,” said Dr Burn. ”The last time we saw this happened was in the third quarter of 2008 (the start of the global financial crisis). We’re now seeing a similar decline in new orders.”

He said forward orders, such as construction activities, could be uneven and unpredictable.

He agreed that the construction activities downturn could be due to political uncertainty and the election.
However, the combination of the end of the Building Education Revolution (BER) program and the end of the government fiscal stimulus was said to be the primary reason for the slowdown.

The recent interest rate rises, the tight finance restrictions on new house building and weak demand from first time home buyers are some of the reasons to be blamed by home builders.

Source: The Australian News