Despite a rise in building approvals in August, builders remain concerned that the drop in interest rates has not stimulated enough activity. The current figures for building approvals highlight the long road ahead to a sustainable recovery.
Industry analysts comment that “more concerted reform for new housing, which is one of the most heavily taxed sectors of the Australian economy, would be a driving force for an improved outlook”. A survey of more than 500 builders confirmed that interest rate cuts have failed to lift confidence across the building and construction sectors.
The failure of rate cuts to make a significant impact is a disappointing survey finding. It should come as no surprise that builders are reducing their operations, including staff levels. The survey also found that conditions are now weaker that during the global financial crisis.
The industry has pinned its hopes on another rate cut in October to boost confidence where previous efforts have failed.