Confidence in construction industry at highest point since GFC

Confidence in the outlook for the construction industry has hit its highest level since March 2008, although it will take time for improving conditions to translate into new jobs in the sector, a national survey has revealed.

Confidence improved in the March quarter across all measures of business activity and expected profitability, the Master Builders National Survey of Building and Construction, released last week, found.

Builders surveyed reported improvements in sales contracts, display centre enquiries and work on books compared with the previous quarter.

The index for builders’ own business activity rose in March for the third consecutive quarter, reaching 62.8, well above the neutral 50 point mark. This indicated builders expected business activity to pick up over the next six months, Peter Jones Master Builders chief economist said.

“This is particularly reflective of the residential building sector’s response to low [interest] rates and is an encouraging trend,” Jones said.

The Master Builders Association expects improvements in the outlook for work to increase margins and profitability, allowing builders to consider hiring employees and sub-contractors.

However, the index for hiring intentions in the sector rose to only a neutral level of 50.2, indicating most employers surveyed would keep headcounts level in the next six months. Demand for apprentices increased slightly, with 22.2% saying they planned to hire new apprentices.

The survey showed the availability of labour in the sector has increased, with builders having little difficulty in finding staff across all categories of worker. There were particularly high levels of availability of electricians, painters and building consultants.

The Master Builders Association noted that as the business cycle turned and conditions improved, it was likely that builders would once again experience some difficulty in finding certain types of sub-contractors and employees.

A separate study by the Department of Employment, also released last week, showed the number of job advertisements for construction trade workers increased by 2% in March compared with the previous month.

Over the year to March 2014, job ads for construction workers were up by 33.7%, according to the Internet Vacancy Index, which counts online job ads newly lodged on SEEK, MyCareer, CareerOne and Australian JobSearch during the month, although the increase came from a low base.

National availability of labour (index)

Role

Sep-13

Dec-13

Mar-14

Site Manager

23.7

34.8

29.3

Project Manager

33.7

33.9

26.0

Foreman/Supervisor

32.7

34.1

23.9

Concretors

16.3

22.9

19.0

Bricklayers

18.3

31.6

18.5

Steel Fixers

17.4

26.8

15.3

Office Staff

16.3

18.4

15.3

Tilers – Wall and Floor

15.6

26.6

14.7

Plaster Fixers

14.8

17.1

13.8

Carpenters

20.3

22.2

13.7

Scaffolders

11.1

15.9

11.3

Labourers

12.5

21.0

10.3

Tilers – Roof

12.3

14.1

9.8

Building Consultants

14.3

16.5

9.2

Painters

9.6

17.1

8.2

Electricians

15.1

15.3

7.1

Note: Respondents are asked about the degree of difficulty in finding a range of subcontractors/employees. The higher the index, the more builders are experiencing large difficulty in finding employees or sub-contractors. A low index reading indicates slight or no difficulty in finding subcontractors/employees.

Source: Master Builders Association ‘National Survey of Building and Construction’ (March 2014).

This article first appeared on Property Observer.

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