BUILDING activity shrank by 5.5 percent during the June 2019 quarter to record its weakest result in two years with both resident and commercial activity moving lower, according to Master Builders Australia’s chief economist Shane Garrett.
“Today’s figures from the ABS show that the volume of residential building dropped by 4.5 percent during the June 2019 quarter with commercial building contracting by 7.2 percdent over the same period. However, the forward-looking approvals data published last week suggest that the short-term prospects for commercial building are still quite favourable,” Mr Garrett said.
“Up until recent times, commercial building had been one of the economy’s strong performers but today’s figures indicate activity here too has started to falter,” Mr Garrett said.
“Economic growth has been hurt by the decline in residential building activity which has been underway since late 2016.
“Domestic demand in the economy is lacking in energy at the current time which is why the onus lies so heavily on government to get things moving,” Mr Garrett said.
“Speeding up the roll out of already-committed infrastructure projects is the most obvious way to kick start demand in the economy. All levels of government need to work more closely together to help achieve this,” he said.
“Once new infrastructure is in place, it can spark off activity in other parts of the economy by enhancing the economic viability of potential residential and commercial building projects.
“Faster infrastructure delivery is the key to unlocking recovery in our building industry,” Mr Garrett said.