The housing industry is in a slump which is bad news for home owners and even worse news for banks whose most profitable business is losing earnings potential. But it’s also bad news for builders and suppliers, and no more so than brickmakers.
Brickworks Ltd has already cut production in NSW because of the sluggish market and now the Australian Bureau of Statistics has produced figures which show brick output fell to its lowest level in the March quarter in at least six years.
Brick production was 323 million in the March quarter, compared with 359 million in March last year, 383 million in the March quarter of 2005 and 409 million back in the same quarter of 2003. In fact, production of bricks has been on a steady downward trend since peaking in the September quarter of 2003 at 465 million. Since December 2006, production has been under 400 million bricks a quarter and falling.
But the ABS figures show that production of Portland cement and pre-mixed concrete are still going strong, with higher production levels in the March quarter than in previous March quarters: that’s the resources and infrastructure booms at work.
Output of gas and electricity in the March quarter also rose on the same quarter of 2007 and in years previous to that. And lending finance figures for March from the ABS confirm the downturn in housing and most forms of personal and business credit.
The ABS said that the total value of owner occupied housing commitments excluding alterations and additions fell 1.2% in trend terms and 4.4% in seasonally adjusted terms.