More building and construction jobs are set to be created in 2015 by the looming housing boom, the latest Master Builders Australia National Survey of Building and Construction has shown.

The increase in employer hiring intentions in the December quarter of 2014 will mean more job opportunities for tradespeople and sub-contractors in 2014, as business conditions and confidence about the pipeline of work and profits rise to levels not seen since before the Global Financial Crisis.

Young people are most likely to benefit from this growth, with the index measuring builders’ intentions to put on more apprentices hitting a seven year high, and a third of survey respondents indicating they intend to put more apprentices in the next months.

Despite the positive trend, Master Builders chief economist Peter Jones continues to call for pragmatic action from government to boost business confidence.

“A lift in business confidence and pragmatic reforms to increase productivity are needed if the industry is to play a greater role in helping to meet the gap in investment and job creation left in the wake of the resources boom,” he said.

“As Federal Parliament is about to resume, Master Builders Australia, in its Pre-Budget Submission, will call for a more pragmatic Budget repair strategy to ensure that business confidence is not undermined.”

Survey trends:

Apprenticeship system

Builders are looking to the government for new thinking to enable builders and education providers to enhance pathways from school to apprenticeships. This will ensure the increased demand for tradespeople will lead to the best outcomes for the industry and young people.

Already the government has committed to an apprenticeship system that would meet the needs of industry, with Assistant Education Minister Simon Birmingham having attended six of eight face-to-face consultations about the future of vocational and education training (VET) systems.

“Our government is embarking upon an ambitious program of VET reform to lift the quality of
both training providers and their courses, so as to further enhance the contribution VET makes to the employment prospects of students and the competitiveness of Australia's economy," said Senator Birmingham during his recent engagement in Perth.

Builder confidence

The survey indicates that builders are expecting industry activity growth in the next six months, which is translating into increased confidence in their own business prospects – the highest since 2008.

Residential builders are particularly optimistic as the Australian Bureau of Statistics approval figures released early last week (3 Feb) show that Australia has recorded more than 200,000 dwelling approvals for the first time ever.

“The historic high is being driven by the boom in apartment building in Sydney and Melbourne that shows no immediate sign of abating,” said Jones.

“Builder confidence will be boosted by the strengthening pipeline of work that will drive much needed job creation and investment in both the industry and the wider economy.

“The boom in approvals will eventually flow through to increased housing supply and work to help ease affordability pressures.

“However, urgent reforms to remove the shackles of poor land release strategies, inefficient developer charges/ infrastructure levies as well as poor planning and development programs are needed if the housing upturn is to gain further traction.”

House building profits & investment on the rise

The index measuring profitability of building firms also recorded its best result in nearly four years, with more than 60 per cent of Master Builder survey respondents expecting profit levels to increase over the next six months.

“2015 will see the benefits of the looming housing construction boom increasingly flow through the supply chain to boost the wider economy with the Survey recording a sharp rise to a seven year high in builders’ intention to invest in plant and equipment,” said Jones.

Commercial construction

While the survey indicates good news for builders in the residential sector, this has yet to translate to a solid pick up in commercial construction activity.

“The commercial construction continues to suffer from weak business investment and conditions have a long way to go before they could be described as healthy. The Reserve Bank’s decision to cut official interest rates should help to reboot confidence,” Jones predicted.