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Residential construction activity continues to struggle, according to new GDP figures released by the Australian Bureau of Statistics.
The figures show a decline of 2.1 per cent in new home construction during the June 2013 quarter.
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Housing Industry Association senior economist Shane Garrett said the drop in new home building was very disappointing.
“This means that the volume of new home building is down by 8.5 per cent over the last 12 months from already low levels,” said Mr Garrett.
“The combination of weakening residential construction activity and below trend GDP growth means that strong intervention from policy makers is vital in order to guide the economy back to the right path.
“There are firm indications that the RBA’s rate cuts over the past two years have helped to lift residential construction off rock bottom levels. Today’s figures, however, indicate that more rate reductions are needed in order to prevent this recovery from faltering.
“Today’s figures also indicate that government investment has plunged over the past quarter. The weakening of household spending is not unrelated to this. Government needs to lead the way in these uncertain times. Targeted incentives for investment in productive infrastructure like housing will be of significant benefit, both in the short term and over the longer run,” he added.
“More encouragingly, home renovations activity was up by 1.9 per cent in the second quarter of 2013. However, activity in this segment of the market is still lower than it was 12 months ago,” he said.
