We'd like to hear from our members on how this is impacting your business and how we can advocate on your behalf with national and state governments.
The FIA Board are meeting to discuss ways to assist out of work formwork contractors to improve skills capability, verify competence and assist them in getting 'back to work' when the economy improves. Skilled, job ready workers will be in high demand and enable our members to secure future contracts delivering quality work in a safe environment.
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Original article from Urban Developer.
The Australian performance of construction index fell to its lowest point since the survey began 15 years ago as Covid-19 slows activity on building sites, causing new orders to drop and unemployment to rise.
The index dropped 16.3 points to 21.6 in April, exceeding the amount recorded during the global financial crisis, according to the data from the Australian Industry Group and Housing Industry Association.
In the 20th consecutive month of contraction, all four sectors were affected; in trend apartment building performed the worst (down 4.5 points to 22.1), house building falling in further negative territory (down 5.3 points to 37.1), engineering construction bounced around its record 2020 low (down 1.1 to 36.6 points) and commercial construction was down 4.3 to 24.5 points.
The Covid-19 fallout has radiated across the economy hitting the industry hard from construction jobs and household purchasing power to migration and real estate listings.
A PCI result over 50 shows a construction sector expanding while under 50 contracting, the distance from 50 indicates how severe the change was.
While majority of scores contracted, input prices were up, showing costs were not being passed onto customers and were largely being absorbed by builders “squeezing already-slim margins” .
Ai Group head of policy Peter Burn said performance has never fallen as rapidly in a single month as it did for April.
“The fallout from Covid-19 played havoc with the already weak domestic construction sector in April ,” Burns said.
“For the sector as a whole, seasonally adjusted measures of activity, employment and new orders were at all-time lows.
“Two particularly disconcerting indications are the precipitous fall in new orders and the first ever indication of a monthly fall in nominal wages.”
HIA chief economist Tim Reardon said the positive momentum that existed in the housing market has been disrupted, as consumer confidence started to evaporate from March.
“The seasonally-adjusted indexes for building activity and new orders in both the house and apartment markets all suffered their largest single-month drop in the history of their respective series, falling to record lows,” Reardon said.
“The speed with which the industry is likely to bounce back, especially apartment markets in the larger capitals, will depend very much on the outlook for overseas migration.”
Commsec senior economist Ryan Felsman said it was an incredibly tough time for business owners and workers, despite the country’s success in fighting Covid-19 which gave a lift in the Aussie dollar against the greenback.
“While the construction sector continues to operate with social distancing measures in place, demand has fallen sharply due to the economic downturn,” Felsman said.
“Despite the improvement in consumer views on their finances and the economic outlook, caution remains with overall confidence still remaining near global financial crisis levels.
“Faced with rising job insecurity and an uncertain future, most Aussies are scaling back their discretionary spending.
“In fact, households have become even less willing to consider purchasing a ‘big ticket’ item–not good news for auto alley, whitegoods retailers or real estate agents.”
