4 years ago
RBA WARNS 7% SLUMP IN DWELLING INVESTMENT
BRENDAN O’CONNOR MP
The latest Reserve Bank of Australia (RBA) forecasts for the building and construction industry make for sober reading, warning of a 7 per cent drop in dwelling investment, which will have an impact on GDP growth.
In a speech at the CFA Societies Australia Investment Conference, RBA Deputy Governor Guy Debelle forecasts a drop in dwelling investment.
“We are forecasting a further 7 per cent decline in dwelling investment over the next year, and there is some risk the decline could be even larger. This will directly subtract around 1 percentage point from GDP growth from peak to trough, given that dwelling investment accounts for around 6 per cent of GDP.”
GUY DEBELLE, SPEECH, 17 OCTOBER 2019
This warning comes as the construction industry faced its 13th consecutive month of decline under the Morrison Liberal Government.
The Australian Bureau of Statistics has revealed a significant drop in the number of new homes being built. The decline in new housing approvals and construction would be a blow to construction jobs.
The Australian Industry Group Performance of Construction Index (PCI) registered 42.6 points in September – a decrease of 2.0 points from August.
There were falls in activity across residential, commercial and engineering construction sectors. Employment also took a hit with job declines continuing in September 2019.
The economy is floundering under the Morrison Liberal Government and they must heed these economic warnings, but they have no plan whatsoever to deal with the significant structural issues facing the industry.
The RBA’s warning follows rising instances of problems in the building industry from cracking apartments, increases in professional indemnity insurance, the use of combustible cladding, and growing cases of phoenixing, all of which are threatening a downturn in the sector along with public safety.
Each day the Morrison Government fails to take leadership and respond to the building industry crisis, businesses are closing down, the safety and lives of Australians are put at risk.
The construction industry is national and is critical to the Australian economy, but this Government is failing to manage the many challenges it’s facing.
The Government aren’t listening to anyone but themselves and its well past time they heed multiple warnings from a number of economists that show the construction sector slowing.
In a speech at the CFA Societies Australia Investment Conference, RBA Deputy Governor Guy Debelle forecasts a drop in dwelling investment.
“We are forecasting a further 7 per cent decline in dwelling investment over the next year, and there is some risk the decline could be even larger. This will directly subtract around 1 percentage point from GDP growth from peak to trough, given that dwelling investment accounts for around 6 per cent of GDP.”
GUY DEBELLE, SPEECH, 17 OCTOBER 2019
This warning comes as the construction industry faced its 13th consecutive month of decline under the Morrison Liberal Government.
The Australian Bureau of Statistics has revealed a significant drop in the number of new homes being built. The decline in new housing approvals and construction would be a blow to construction jobs.
The Australian Industry Group Performance of Construction Index (PCI) registered 42.6 points in September – a decrease of 2.0 points from August.
There were falls in activity across residential, commercial and engineering construction sectors. Employment also took a hit with job declines continuing in September 2019.
The economy is floundering under the Morrison Liberal Government and they must heed these economic warnings, but they have no plan whatsoever to deal with the significant structural issues facing the industry.
The RBA’s warning follows rising instances of problems in the building industry from cracking apartments, increases in professional indemnity insurance, the use of combustible cladding, and growing cases of phoenixing, all of which are threatening a downturn in the sector along with public safety.
Each day the Morrison Government fails to take leadership and respond to the building industry crisis, businesses are closing down, the safety and lives of Australians are put at risk.
The construction industry is national and is critical to the Australian economy, but this Government is failing to manage the many challenges it’s facing.
The Government aren’t listening to anyone but themselves and its well past time they heed multiple warnings from a number of economists that show the construction sector slowing.