Construction work done bounced back in the September quarter but the strong growth phase that has been experienced by the industry over the past five years is predicted to moderate, according to Master Builders Australia (MBA).

Peter Jones, MBA’s chief economist said, “The key to the outlook for the construction industry over the next year or so will be whether an upswing in the residential sector can offset looming weakness in non-residential activity as the previously strong backlog of work begins to ease off.

Despite a strong result in the September quarter, the outlook for engineering construction will begin to turn in line with the fall in commodity prices, although a massive pipeline of resources-related work yet to be done and State Government infrastructure spending should cushion the fall.

“Residential building has been bouncing along the bottom, but will be boosted by fiscal and monetary policy stimulus measures as the Government attempts to recession proof the economy in the face of the global financial crisis.

Businesses in the building and construction industry are also likely to feel the affects of any loss of confidence and adverse economic activity as tenants and building owners become less optimistic and, as a consequence, commission less building work and refurbishments.  

Seasonally adjusted, the chain volume of construction work done in the September quarter 2008 rose by 4.4 per cent to $34.2 billion to be 8.8 per cent above levels in September quarter 2007. 

The chain volume of building work done in the September quarter was down 0.5 per cent to $17.9 billion, to be up 0.8 per cent on the previous September quarter.