Industry activity and profits are expected to fall, which may result in job losses, according to Master Builders Australia’s September quarter 2011 national survey.

Master Builders Australia's chief economist, Peter Jones, said: “Master Builders’ latest national survey for the September quarter highlights a worrying deterioration in business conditions that builders operating in both commercial and residential building are now facing.”

Jones said, “Builders report a worsening in own business conditions and outlook, with private sector demand failing to pick up and fill the gap left as Building the Education Revolution, Social Housing and other government stimulus programs end.”

He added, “The building and construction industry has lost the cushioning effect of government stimulus programs whilst the credit squeeze and other regulatory constraints continue to affect business operating conditions.”

The September quarter national survey reveals that builders expect building industry activity to fall over the next six months. The index measuring builders’ own-business activity weakened in the September quarter.

Builders’ current profitability was rated as poor in the September quarter. Profits are expected to decline over the next six months. Sales contracts were worse than expected in the latest period. Display centre traffic and enquiries fell away in the September quarter.

Employment intentions likewise worsened. Builders expect to reduce employees and subcontractors.

Jones said, “Non-residential or commercial builders, already experiencing poor conditions, face the prospect of falling activity, with conditions in residential building now also expected to deteriorate.”

“With activity and profits under pressure, it is little surprise that builders have indicated that they will be looking carefully at workforce levels in the period ahead.”

“Large parts of the building and construction industry are doing it tough and the Reserve Bank should consider cutting rates or at the very least keeping interest rates on hold until a private sector recovery is able to gain momentum.”