A survey of the Housing Industry Association's builder and sub-contractor members suggests continuing weakness in new home building towards the end of 2011.

HIA acting chief economist Andrew Harvey said that the pressure on the availability of residential building trades had temporarily eased although there remains a structural shortage of skilled labour faced by the housing industry.

"The HIA Trades Report shows that in the September quarter we again had a modest surplus of skilled labour and it marks the first time in the nine-year history of the report that we've had two consecutive quarters recording a surplus," said Andrew Harvey.

"There is no doubt that new home building is in need of stimulus as we head towards the end of the calendar year 2011. The November interest rate cut was a necessary first step but so much more is needed to stimulate a return of residential building to decent levels," said Harvey.

"However, any move to stimulate the residential building industry will be less than efficacious unless we have a larger pool of skilled labour than can currently be accessed - short-term weakness in the industry should not be viewed as a reason to ignore the longer-term need to boost the number of skilled workers," added Harvey.

The HIA Trade Availability Index registered +0.06 in the September 2011 quarter, meaning that trades remained in moderate oversupply for a second consecutive quarter. The September 2011 quarter result represents only the third positive reading for the index in the nine-year history of the report, the others being in the June 2011 quarter and the June 2009 quarter (during the GFC). The reading in the June 2011 quarter was +0.10.

Meanwhile the HIA Trade Prices Index displayed another benign result, growing by 0.1 per cent over the September quarter to be up by only 0.4 per cent over the year.

HIA Executive director, industry workforce development, Liz Greenwood, said: "We need to remember that these statistics relate only to the short-term situation and are very much driven by building activity levels. We can't lose sight of the fact that, in the long-term, trade availability will be in chronic undersupply if measures aren't put in place now.

"It is encouraging to see that the Australian government recognises that this potential time bomb exists and is consulting closely with industry to identify ways in which this scenario can be avoided," added Greenwood.

Architecture & Design Team

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