On November 3, the Reserve Bank of Australia (RBA) kept interest rates at the record low level of 2 percent. Reserve Bank governor Glenn Stevens believes any impending rate change would see interest rates drop further rather than increasing. That’s good news for the corporate building sector, which could otherwise struggle to absorb the impact of rate increases.
Jim Whiting, a corporate building executive, told the Sydney Morning Herald he worried about the impact of potential rate increases. He said interest rates must remain low for a lengthy period, as many corporate builders will struggle to absorb higher rates.
Why Are Corporate Builders in Such a Precarious Position?
According to the Sydney Morning Herald, Australia’s economy is “subdued.” This is making many corporate players and commercial business cautious of investing in new infrastructure. Margins are also already tight in the commercial sector, so commercial builders cannot afford to have their profits further depleted by higher interest rates. Some small corporate builders, like Adelaide’s Tagara Builders, have already collapsed due to these harsh economic conditions.
The instability of some smaller corporate builders can also make commercial clients reluctant to invest. For your peace of mind, contact TPM Builders, a solid commercial construction firm with more than 13 years’ industry experience, on 1300 733 891. You can count on TPM Builders to complete your commercial project on time and to the highest standards.
