Today's GDP figures show no growth in the residential construction industry in the March 2013 quarter, signalling the need for increased policy focus on this component of economic activity and employment, according to the Housing Industry Association (HIA).
"GDP grew by 0.6% in the first quarter of 2013, reaching a level 2.5% higher than the corresponding quarter of 2012," says HIA economist, Geordan Murray. "This is clearly a soft aggregate result (and softer than widely expected), but it is especially concerning that the weakness is evident across so many key areas of the economy."
"In seasonally adjusted terms, the volume of investment in new homes increased by 2.2% over the quarter, as the modest recovery from very weak levels in the first half of 2012 continued. Meanwhile, the on-going decline in alterations and additions investment provides a weak update on the mind-set and appetite for spending on the part of the household sector," he says.
"This result provides further reason to question whether non-mining construction sectors are positioned to fill the void that will inevitably be left by the slow-down in resource-related investment activity. Today's result show that neither the residential nor the non-residential industry was able to contribute to growth during the March 2013 quarter despite 125 basis points of cuts to the official cash rate during 2012.”
"If we are to minimise the inevitable challenges as the economy transitions away from the over-reliance on resource investment there must be a coordinated response from all levels of governments. Federal leadership is a prerequisite to success in this regard.”