As the state election approaches on November 29, the construction industry in Victoria is more optimistic about its prospects than at any other time for at least five years.
Unveiling its Industry Expectations Index, the Master Builders Association of Victoria says builder confidence surged 44 points in the September quarter to come in at 59.2 – the highest level on record since September 2009 – while the percentage of builders reporting six months or more of work on hand surged (33.5) is at its second highest level in at least four years.
In a positive sign for workers, intentions regarding employment levels and apprentices have turned positive and builders are reporting increasing levels of difficulty finding project managers, site managers, foremen, bricklayers, carpenters, concreters, office staff and wall and floor tilers as well as general labourers.
While industry sentiment has been improving since the middle of 2012, MBAV CEO Radley de Silva attributes the latest jump to an improving economy as well as efforts on the part of politicians to win over votes through promises on infrastructure.
“This rise in optimism is happening as builders prepare to watch our politicians spend up big on building and construction projects to win over Victorians voters,” de Silva said. “With less than three weeks to go before Victorians head to their ballot boxes (November 20), I think it safe to assume we will see even more funding for building works like new hospitals, schools, sports grounds and roads.”
Still, he hit out at Labor’s plan to tear-up the East West Link contract, saying such a move would make contractors “question the certainty of work they might derive from any future government infrastructure projects” and that cancelling the project when it is shovel-ready would be “a major blow to confidence and investment in our sector.”
Throughout the state, politicians on both sides in recent months have been pitching their respective infrastructure policies at property and building industry conferences.
Current Premier Denise Napthine promises to create 200,000 new jobs (direct and indirect) through the construction of the East West Link, a new Airport Rail Link and Melbourne Rail Link and fixing 40 level crossings.
Pitching his ideas around the construction of the Metropolitan Rail Link, removal of 50 dangerous level crossings, a direct link into the Port of Melbourne and $2 billion in upgrades to regional and outer suburban roads, meanwhile, Opposition Leader Daniel Andrews told a Property Council conference in October that “one project (the East West Link) is not a pipeline of projects,” and accused the government of shutting the door on consultation with the industry.
The survey also comes as Victoria’s building industry continues to defy gloomy expectations surrounding residential construction following a period of massive levels of building activity several years ago at the height of home owner incentive schemes.
Having previously predicted a fall in housing starts this year, the Housing Industry Association now reckons starts will outstrip their 2013 level by almost nine per cent.
de Silva believes the latest results bode well for construction sector employment throughout the state.
“Builders are now reporting that they have more work on their books, are feeling more positive about our economy’s prospects and are more likely to take on additional people,” he said.