Residential building jobs may be on the chopping block with approvals on the decline.
ABS figures show that residential building approvals fell for the third time in four months in December, capping off a quarter that saw a nearly 13% decline. Master Builders chief economist Peter Jones said the trend is putting the industry under pressure.
"The latest building approval figures are in line with findings of the latest Master Builders' national survey which reveals that industry profits are under pressure and jobs may go," Jones said.
Jones said builders are reporting slumping sales and forward orders, and argued that lower interest rates would be needed to underpin building activity.
""Master Builders Australia believes that the November and December rate cuts by themselves won't be enough," Jones said.
HIA chief economist Harley Dale said the trend in approvals ending 2011 portended further weakness in 2012.
"Building approvals in late 2011 imply that housing starts will fall to a level below that experienced during the depth of the GFC, which would clearly be a very unhealthy outcome," he said.
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Data: Building approvals down, home loans up