Thursday, February 16, 2012

regional building snapshots

The Master Builders have released a regional survey of building conditions. Queensland Economy Watch has an overview and as expected the building sector is subdued outside those regions most closely linked to resources.

I'm not sure how representative the Master Builders are of the sector, however the snapshot for the Far North was weak with the summary:
  • Building activity in Far North Queensland is expected to remain fairly subdued over the coming quarter, with results amongst the weakest of the regional centres.
  • Business profitability and turnover fell during the quarter, remaining below satisfactory levels and making Far North Queensland amongst the weakest regions in the state.
  • Employment levels fell during December, with a substantial proportion reporting a reduction in the size of their workforce; however, the outlook for employment improved, with the majority forecasting no further staff cut backs over the next three months.
  • The subdued level of demand was once again the number one constraint on business growth, followed by finance availability and cost and interest rates.
The most interesting regional differentiation is actually in the 'hot topic' question with this chart outcome for the Far North:

While other regions do rate the factor highly the Far North is the leader, well above the average and all other regions, in responding that financial assistance for buyers is the most effectve strategy for housing affordability. I had thought buyer grants had been pretty much discredited as a means to housing affordability and generally rather become grants to the vendor. I guess the Master Builders are vendors?

The other anomaly is that only the Far North placed such prominence in second place to Guvmint requirements. This was even noted in the comments and is unique to Far North. The Far North relegated land development cost to near irrelevance while this is in the top two everywhere else and also top of national economic debate on affordability! What to make of this anomaly?

The Far North response is entirely based on direct Guvmint intervention whether it be funding grants or reduced regulaton? Does this say something?

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