Environmental News

Job losses on the cards for building sector

Each quarter Master Builders Australia is asked to complete an online survey canvassing their members? views on the national economy and conditions within their own businesses.

The job losses forecast in this survey are likely to come early this year as businesses struggle with falling sales and profitability.

The survey’s index measuring current business condition fell from 47.4 to 45.2 in the three months to December.

A reading below 50 indicates a decline in activity over the quarter and a lower reading indicates a greater decline.

The index measuring builders’ intentions about staff numbers and the use of subcontractors over the next six months fell to 37.0, indicating builders expect to reduce the size of their workforce.

The survey also showed the sector was suffering a credit crunch, with nearly 40 per cent of businesses reporting a lack of access to finance as a constraint on their business, the highest percentage since the global financial crisis.

Master Builders Australia chief economist Peter Jones said the survey showed builders needed greater support from the Reserve Bank of Australia, which has cut the cash rate 1.75 percentage points since November 2011. He believes further interest rate cuts are needed.

?The Government can no longer simply leave all the heavy lifting to the Reserve Bank. A short term increase in the first home owner?s grant for new houses and bringing forward of civil works, combined with rate cuts, will go a long way towards restoring confidence,? Jones said.

Sources: Master Builders Australia, AAP, Business Spectator

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