Residential building sector figures “better than expected”

GREEN shoots are emerging from the residential sector of Central Queensland's building industry.

September Quarter figures, released in Master Builders' Survey of Industry Conditions showed business confidence hitting negative territory for the first time since the Global Financial Crisis.

But there are positive signs emerging, with the report found both commercial and residential sectors showed "strong improvement", which is expected to improve further in the next quarter.

Turnover and profitability improved, although they remained in negative territory.

The report concluded this performance was "better than expected" given the slowing resources sector had dulled employment and consumer sentiment.

The report found the most critical constraint on the industry was "lacklustre level of demand".

Another concern was a tightening up of borrowing from lenders, making it difficult for home buyers.

The report said this was being driven by valuers representing mortgage lenders providing a house value which did not meet the cost of a house and land package, leaving many unable to proceed with the build.

While fewer businesses reported reductions in employment levels, the report found wage expectations were still being led by the resources sector.