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ISCOVER
Staff Reporter
The residential construction industry has stagnated and needs urgent policy attention, according to the Housing Industry Association (HIA).
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GDP figures released yesterday showed no growth in the residential construction industry in the March 2013 quarter, prompting the HIA to call for “increased policy focus on this key component of economic activity and employment”.
HIA economist Geordan Murray said the results were concerning and showed weaknesses across many areas of the economy.
“In seasonally adjusted terms, the volume of investment in new homes increased by 2.2 per cent over the quarter, as the modest recovery from very weak levels in the first half of 2012 continued,” he said.
“Meanwhile, the ongoing decline in alterations and additions investment provides a weak update on the mindset and appetite for spending on the part of the household sector.
“This result provides further reason to question whether non-mining construction sectors are positioned to fill the void that will inevitably be left by the slowdown in resource-related investment activity. Today’s result shows that neither the residential nor the non-residential industry was able to contribute to grow during the March 2013 quarter, despite 125 basis points of cuts to the official cash rate during 2012.
“If we are to minimise the inevitable challenges as the economy transitions away from the over-reliance on resource investment there must be a coordinated response from all levels of government. Federal leadership is a prerequisite to success in this regard,” said Mr Murray.
