Australia's Master Builders Association and Property Council have called for more emphasis on construction in the wake of a 0.2 percentage point subtraction from the June quarter GDP result.
The Australian government has the means to turn around the country's economic growth rate but must act sooner rather than later, Master Builders Australia says.
The national GDP figures released on Wednesday show that Australia’s economy grew by 0.5 per cent during the June 2019 quarter equivalent to a 1.4 per cent annual growth rate – the lowest since September 2009
Master Builders Australia CEO Denita Wawn said the situation required an "urgent acceleration" of infrastructure projects to the construction phase and more discussion of measures to encourage business investment.
“We need investment in new plant, equipment and other assets need to be sharpened so that the appetite for growth and expansion returns,” she said
“Many components of domestic demand have shrunk over the past year – including key elements like business investment in addition to both residential and commercial building. Even though household spending has grown it has done so at the weakest pace in years.
"Announcements won’t kick-start economic growth, which is why governments need to streamline planning and approvals processes and harness the capacity of smaller construction contractors.”
Property Council of Australia Chief Executive Ken Morrison. Source: Property Council of Australia
According to the figures, dwelling investment fell by 4.4 per cent in the June quarter, and was down by 9.1 per cent over the year, leading a 0.2 percentage point subtraction from the June quarter GDP result.
Property Council of Australia Chief Executive Ken Morrison said that while the stabilisation of housing prices was important for consumer confidence, housing construction was the "critical driver" of investment and jobs
"We’ve been highlighting the potential impact of a slowdown in housing construction on economic growth for some time, and this is now clearly showing up in the June quarter GDP result,” he said.
“The housing construction pipeline is constricting, with building approvals down 24 per cent over the past year.
“Stronger housing prices may lead to a turn-around in construction activity down the track, but the current reality is that construction is slowing and that will weigh on economic growth and employment well into 2020.
“These are the dynamics of the housing markets that must focus the minds of policy-makers across all levels of government.
“The biggest issue remains access to finance for purchasers and there is a need to continue to focus on this pressing issue."
Click here to view the latest GDP results.
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