past three decades. based on the feedback from our liaison contacts, many of these firms are in the construction industry, including residential construction. availability of labour is also an issue, especially in western australia, but this is not specific to construction. graph 9 availability of materials as a constraint on output share of firms reporting significant or minor constraint % % minor constraint significant constraint sources : nab ; rba it is worth noting that residential construction is also affected by conditions in other parts of the broader construction sector. non - residential construction activity by the private sector is not unusually strong at the moment, but the pipeline of work yet to be completed is at the upper end of its normal range relative to the size of the economy ( graph 10 ). the pipeline of planned public infrastructure projects is also quite large. there are some inputs and skills that are specific to one sub - industry – there isn't much call for tunnel engineers or crane drivers in detached homes construction, for example. but in broad terms, it seem that all segments of the construction industry are making a relatively large call on the same material and labour resources at the same time. it is therefore not surprising that the pipeline is remaining large, cost pressures are squeezing margins, and delays are longer than usual. that is a big part of the reason why we expect dwelling investment to remain high for some time, as this pipeline is worked down. graph 10 building and engineering pipeline per cent of nominal gdp % % building pipeline public buildings private buildings % % engineering pipeline public infrastructure private infrastructure sources : abs ; rba the backwash from the wash - out over time, the short - term fillip to demand from homebuilder and other temporary support measures will work its way out of the pipeline. as interest rates increase, the boost to demand from the current low interest rates will also wane. and the shifts in demand stemming from the pandemic will have worked their way through. as these more transitory factors wash out, what will this mean for the housing and construction markets? the first observation to make is that prices will also shift, and this will both reflect and produce some of the adjustment in quantities. the cost of building a new detached home has increased markedly in recent quarters, and so has the price of the land it sits on ( graph 11 ). the combination of large rises in the cost of materials and the high level of demand represented by recent commencements has seen to that. prices of existing homes have been easing in some cities

mandated central clearing of interest - rate derivatives denominated in australian dollars and other major currencies for internationally active dealers. 1 over the next year or so, the rba ’ s priorities for work in this area will include two key elements. the first is the development of more robust crisis management arrangements for fmis. the rba currently sets standards that the fmis it supervises are required to meet. these standards provide a high degree of assurance regarding the stability of these entities, but they don ’ t rule out the possibility that they could experience severe financial difficulties, prejudicing the stability of the overall financial system. given this, it is important that there are appropriate arrangements in place to deal with such an eventuality, should it ever arise. the current arrangements in this area were considered by the fsi and have been under review by the council of financial regulators for some time. in its response to the inquiry, the government endorsed the implementation of a framework to provide regulators with clear powers in the event that an fmi was heading towards failure. this is consistent with an existing proposal consulted on by the government to make the rba the resolution authority for central counterparties and securities settlement facilities based in australia. under the proposed arrangements, the rba would be able to give formal directions and to intervene if severe financial stress of an fmi risked causing wide disruption to the financial system. one way that the rba might do this is to appoint a statutory manager to operate the critical functions of the fmi for a period of time. this is similar to the framework that is already in place for banks and that is the responsibility of apra. for a more detailed update on the progress of reforms, < http : / / www. rba. gov. au / speeches / 2015 / sp - ag - 2015 – 10 – 22. html >. see edey ( 2015 ), available at bis central bankers ’ speeches developing these arrangements for fmis is a significant task. changes in legislation are required and the rba is developing detailed strategies and operational arrangements. these efforts are drawing on international work on resolution strategies led by the financial stability board, as well as similar work that has been undertaken for banks. the second, and related, priority relates to the growing threat to fmis from cyber attacks. by their very nature, these entities are heavily dependent on technology and connections to external parties, and this dependency has increased over recent years. at the same time, the nature of cyber