The Australian Bureau of Statistics (ABS) has confirmed today the need for governments to focus on tackling supply-side challenges in the building and construction industry.

The release of the monthly Consumer Price Index (CPI), building approvals and construction work done paints a clear picture of the flow-on effect if inflationary impacts are not appropriately tackled Master Builders Australia chief executive Denita Wawn says.

“Difficulties with the supply of materials and labour has been placing pressure on new home building activity. These unfavourable cost conditions helped push new dwelling purchase prices up by 20.4% over the year to October 2022,” she says.

“The large rise in new home costs is one of the main reasons why the inflation rate has risen across the economy.

“There was a 2.2% increase in the total volume of construction work done during the September 2022 quarter. This was largely driven by the solid increase in civil/engineering construction (3.4% over the quarter. However, there were also gains for both residential (1.3%) and non-residential building (1.1%) over the same period.”

She adds that newly released approvals data indicate that home-building activity will move lower over coming months.

“There was a 6% drop in the total number of new home building approvals during October 2022 and a particularly sharp decline (-11.3%) in the number of medium/high-density dwellings,” Denita explains.

“Governments at a state and territory level must double-down on their efforts to address issues that continue to frustrate the industry like lengthy delays in approvals for land title, development and building applications and occupation certificates.”