BIS expects recovery in residential building
But the improvement won't be broad-based; non-residential building is expected to "drift sideways" - with the exception of the commercial and industrial markets.
"As the Australian economy begins to respond to lower interest rates and more positive global economic news, confidence will tentatively return", according to BIS Shrapnel's building industry prospectus.
The value of building commenced is expected to rise 3 per cent over the current financial year, after falling about 1 per cent in 2012-13.
NSW will put in the strongest performance, with 13 per cent growth, followed by South Australia at 8 per cent and Queensland at 7 per cent.
Victoria is expected to act as a "minor drag", with a 2 per cent decline. As the mining boom fades, Western Australia will experience a 6 per cent decline.
Continued population growth is also tipped to cause housing supply issues in NSW, Queensland and Western Australia.
Dwelling commencements are expected to rise 8 per cent when the final statistics for 2012-13 are compiled. They are forecast to rise another 2 per cent this financial year.
In the non-residential sector, BIS Shrapnel is forecasting a "modest" 4 per cent expansion in building commencements, which includes mining, defence, commercial, and industrial spending.
Frequently Asked Questions about this Article…
BIS Shrapnel is forecasting a recovery in the residential building sector in 2013-14, with national building starts rising for the first time in three years and the new homes market driving that improvement.
Yes. BIS Shrapnel expects the construction industry to see a recovery next year driven mainly by residential work, and it forecasts the value of building commenced to rise about 3% over the current financial year after a roughly 1% fall in 2012-13.
BIS Shrapnel expects dwelling commencements to rise 8% when the final 2012-13 statistics are compiled and to increase a further 2% in the current financial year, indicating improving activity in the housing construction pipeline.
Non-residential building is expected to 'drift sideways' overall, although BIS Shrapnel forecasts a modest 4% expansion in non-residential building commencements when accounting for mining, defence, commercial and industrial spending.
BIS Shrapnel identifies commercial and industrial markets as exceptions to the broader sideways trend in non-residential building, meaning these sub-sectors are more likely to see improved activity.
New South Wales is forecast to perform strongest with about 13% growth, followed by South Australia at 8% and Queensland at 7%.
Victoria is expected to act as a minor drag with a forecast 2% decline, while Western Australia is forecast to fall about 6% as the mining boom fades.
BIS Shrapnel warns that continued population growth is tipped to cause housing supply issues in New South Wales, Queensland and Western Australia, which could influence demand for new homes in those states.
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