Earnings from building products manufacturers have illustrated the extent to which Australia's housing construction sector is struggling to achieve its hopes for a full recovery.
Firms such as Boral Ltd, CSR, Adelaide Brighton and Fletcher Building Ltd have cut costs and jobs as high costs and industrial relations issues have hampered earnings.
“I think that costs are extraordinarily high by global standards,” Boral chief executive Mike Kane said, according to The Australian Financial Review.
Boral reported a heavy swing to a full-year loss of $A212.1 million from a $A176.6 million profit in the previous year.
Fletcher Building reported a 22 per cent fall in operating earnings in Australia, with the firm's head, Mark Adamson, describing Australian residential and commercial construction conditions as “weak” and in need of “a dose of Margaret Thatcher”, in reference to union power and high-cost issues, the AFR reported.
“In the broader, macro sense, I do come across unions and union arrangements [in Australia] the likes of which I have not seen since I was a child watching TV in the UK in the '70s,” he reportedly said.
“I've been recruiting recently for a number of the senior roles ... and naturally you look closer to home in Australia and New Zealand. I've ended up picking up people from the US and the UK because they're demonstrably cheaper.”
Mr Adamson added that in the broadest sense he finds the Australian economy attractive, and recognised the need for unions. But he said Australia has become too inefficient and high-salaried.
"I think there are some spots of hope around [New South Wales], some of the coal-seam gas projects on the eastern seaboard -- Queensland, potentially through to NSW are positive -- and Western Australia will probably at some point return to an economy we have enjoyed in the past," Mr Adamson said, according to The Australian.
The inability of the housing sector to mount a sustained recovery despite record-low interest rates is likely to spark additional concerns for the Reserve Bank of Australia (RBA).