As the Reserve Bank of Australia pushes ahead with its inflation-fighting interest rate rises, the construction sector is hoping for a cautious approach that ensures a soft landing for the Australian economy.
Construction is the canary in the coal mine as the Reserve Bank of Australia pushes ahead with its inflation-fighting interest rate rises, and those in the sector hope the central bank doesn’t go too far.
Increased costs for building work come as the RBA pushes up the price of borrowing, and they are a first step in what is expected to be a sharp housing downturn.Pilcher estimates the present work pipeline will eventually dry up, but he’s not yet getting calls from people seeking work – usually the first sign a slowdown is in train.
Characterised as the RBA moving to an inflation-fighting footing, it is the most aggressive tightening cycle in almost 30 years and is a long way from the outlook in late-2021 of rates on hold until 2024. CBA head of Australian economics Gareth Aird is not convinced the RBA will push through a third double-rate rise in August, suggesting it will want to see the June quarter inflation data due to be released in late-August.
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