Australia’s construction sector is in crisis from a ‘perfect storm’ of factors that contributed to the worst conditions since the 1970s.
Australia’s construction industry faces enormous challenges that have contributed to the collapse of two major companies – with fears of the future of a third.
One of Australia’s largest builders, Metricon, has denied speculation that it is about to collapse after the shocking death of founder Mario Biasin, but many of his customers and employees remain concerned about the future.
A Queensland couple who signed a contract with Metricon to build their home near Ipswich said they had not received any information about the status of their construction, with the company pointing them to a media statement in response to questions.
Emily Martin told Nine Newspapers that she signed a contract with Metricon in November, but wasn’t sure when construction would begin.
“Between our land deposit and home deposit, we have $38,000 out of pocket, and we’re not within a month of construction starting,” she said.
The speculation surrounding Metricon, which employs some 2,500 people and some 4,000 homes are under construction, follows the collapse of construction giants Condev and Probuild earlier this year.
Industry expert Adrian Hart said it was the toughest time in construction in 50 years.
“The feedback we’re getting is that these are the worst experiences they’ve ever had in terms of cost and capacity challenges – and that includes the massive increase in resources,” BIS’s head of construction and infrastructure told Oxford Economics. to 7News.com.au.
“You have to go back to the oil shock of the 1970s to get a sense of the kind of price hikes we’ve seen in the industry right now.
“It’s the worst experience we’ve had in the industry, period.”
The construction sector has been hit hard by price increases for materials, partly due to: global delivery issues and high fuel costs. The Covid pandemic has also led to staff shortages.
Labor campaign spokesman Jason Clare and former Prime Minister Scott Morrison acknowledged the problems during the election campaign.
“They have a problem with a lack of skilled workers,” said Mr Clare sunrise on May 20, citing Metricon’s troubles.
“Unbelievably, there are fewer apprentices and trainees in training today than 10 years ago when this crowd was elected,” he said, pointing to the Morrison government.
Mr Clare said Australia did not have as many skilled workers, backpackers or international students as it would if its borders were not closed.
Morrison acknowledged that supply chains had been disrupted and that inflationary pressures existed.
“The challenge is about inflation. The challenge is about the disruption of supply chains. And the challenge is to make sure we can get more of what’s happening in our supply chains on land,” Morrison told reporters on May 19.
Real estate economist Andrea Blake of QUT said the Morrison government’s HomeBuilder plan to give people $25,000 for new construction or renovation has also contributed to the problem.
“It’s like the perfect storm with the huge success of the Covid stimulus packages, which really boosted the market,” said Dr. Blake at 7News.com.au.
“And then they’ve been hit by material supply problems, cost increases and skilled labor shortages and possibly further interest rate hikes, which have really weighed on profits and overburdened the construction industry.”
dr. Blake believes there will be an “inevitable” slowdown in the industry and advises Australians to wait for things to stabilize before starting construction work.
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