Builders much more optimistic than current conditions would warrant

Broadly speaking, humans are biased towards being optimistic, and the Master Builders Survey of Industry Conditions for June 2014 is a good example of the optimism bias. Builders across Queensland, and especially in the South-East, are much more optimistic about the future outlook than you may expect based on current profitability (see chart below). Let’s hope the building industry has a good sense of future work in the pipeline, because the recent increase in the unemployment rate suggests a weak short-term outlook for the Queensland economy (see Unemployment keeps rising). Also, building approvals, while higher than a year ago, are still significantly below levels seen before the financial crisis.


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