Building industry of Australia plummets

How is the building industry in the domain of Australia behaving? The situation is dejected like other countries in the sphere of Europe and USA specifically and according to the latest information, it is waning further. It should be noted, as indicated by the latest reports the Australian construction industry is going down since the demand for new buildings due to the recession has hit the bottom already.

On the other hand, according to a report by the Australian Industry Group and Housing Industry Association released in Sydney, an index measuring construction fell 4.6 points to 29.5 from January. This is indeed shocking!

If we take into account the present period, it’s the 12th month of shrinking construction work and this indicates the lowest borrowing costs in 45-years. What has been the role of the government then? The government has come forward with grants to first-home buyers but it has failed to embolden the market and also the demand for houses.

The name of Central bank Governor Glenn Stevens should be mentioned in this context. The Governor is instrumental in reducing standard interest rate by four percentage points to 3.25 percent between September and February. In accordance with his own statement, it is hoped that the reductions will encourage economic growth later this year.

Tony Pensabene, the Associate Director of economics at the Australian Industry Group said on this, “There was no let up in February for struggling construction firms as the relentless pressure of tight credit conditions and low market confidence continued to hit demand.” “Firms faced intensifying competition for contracts and a further narrowing of business opportunities.”

A lot of other reports portray the same stagnation in the fiscal scenario of Australia. One such report states the shrinkage in economy by 0.5 percent in the fourth quarter, which is the first contraction in eight years.

The other notable declines include the sector of apartment building which fell to 23.9 points from 26.8 in January; decline in house construction to 27.6 from 31.9.