Broader inflation retreats as red tape holds construction industry back
Broader Australia has let out a sigh of relief as the latest inflation figures show a downward trend, giving hope of some household budget relief for consumers.
Bucking this downward trend is the housing industry as inflationary impacts still hamper this sector and the rental market.
The most recent figures from the Australian Bureau of Statistics confirm housing and rental inflation trends are out of step with the rest of the economy, and Master Builders Australia are quick to place the blame squarely at the government red tape regulatory burdens, which they argue is holding the industry back.
Master Builders Australia Deputy CEO Shaun Schmitke said Australia’s annual inflation rate dropped to +4.3 per cent during November, the lowest since the start of 2022.
“Across most categories of goods and services, there was a reduction in inflationary pressures with the exception of rents, where annual inflation accelerated to 7.1 per cent in November compared with 6.6 per cent in October,” Mr Schmitke said
“New dwelling costs have also intensified, having risen by 5.5 per cent over the past year and a lack of enough new housing supply continues to impede our battle against inflation.
“Inflation is a productivity killer, there is clearly a need for renewed urgency to tackle high costs and labour shortages in the building and construction industry.”
Master Builders, along with other peak industry bodies, continue to strongly opposes the ‘Closing Loopholes’ workplace reforms impacting independent contractors.
They maintain that complicating contractor engagements are making it harder for trades to move between projects that ultimately drive up construction costs.
In more positive news, the ABS also released engineering and construction activity for the September 2023 quarter which racked up its sixth consequence quarter of growth.
Mr Schmitke said the total volume of work done was up by 1.9 per cent compared with the previous quarter and is now 14.3 per cent higher than a year earlier.
“Public sector projects continue to be the major driver of activity, and during the September 2023 quarter, the volume of construction activity done for the public sector surged by 5.0 per cent.
“However, there was a slight reduction in private sector work (-0.6 per cent) over the same period.
“With our economy facing such a formidable productivity challenge, the steady accumulation of more public infrastructure will eventually lead to productivity improvements,” Mr Schmitke concluded.