5 Indicators Hinting the Future of the Construction Industry
There is much talk about what the future of business looks like, and this conversation is particularly prevalent in the building and construction industry.
Everyone is asking, what does it look like? Will it boom or decline? What can we expect? And do more tough times lay ahead?
There is no doubt that COVID-19 has had a huge impact on this sector in particular affecting consumer and investor confidence. It is not unreasonable to accept this overall uncertainty has largely contributed to a downturn across the economy and the country as a whole.
According to the Australian Bureau of Statistics (ABS) (BusinessWire Article), there was an average decline in the construction industry of 2.1% in 2020. This was backed up by employment figures in this sector falling by 2.6% accounting for a little under 10% of total employment across the economy.
Despite the construction industry being designated as an essential service and exempt from many of the pandemic restrictions, there were still limitations on labour availability and allowances on worksites.
The requirement for social distancing as well as ongoing disruptions from supply chains has wreaked havoc with a multitude of projects and ultimate deadlines.
Whilst evidence supports the year started well, there is still an underlying tone that investors are reluctant and somewhat hesitant to put more money into constructions projects. This is partly due to many projects currently in the pipeline or planned, at high risk of getting cancelled – if they haven’t been already.
This uncertainty has had a natural flow-on effect on the Australian economy with the construction sector accounting for approximately 8% of the output.
But, before we begin to believe the future holds nothing but more doom and gloom, much evidence suggests there is a visible light at the end of the tunnel and a bright and positive outlook for the future of the construction industry.
According to a Deloitte report (Deloitte Article), Australia is one of just 5 countries that entered 2021 very well placed.
Forecast planning for 2022-2025 suggests the industry will gain momentum with future growth expected to be partially driven by a government focus on infrastructure. This focus, as well as other contributing factors such as the first home loan deposit scheme, home builder program, a proposed upgrade to the NBN and government investments on road and rail all lead to new and accelerated spending in this area.
Most reports suggest that despite feeling slightly cautious and with some residual side effects of the last two years, business confidence is on the rise around the country. A continual increase in vaccination rates is also fuelling the feeling of hope for a future with minimal or no restrictions.
When we look at the housing and residential side of the industry, the government announced in April they had already received 121,000 homebuilder applications that were expected to support future construction projects.
In the last quarter of 2020, there was approximately $272 billion in total worth of committed or under-construction projects.
There was a further $15 billion worth of projects in the planning or under-consideration stages.
With engineering construction heavily supported by funded infrastructure projects, future projections suggest a welcome blanket increase across the sectors.
Investment into Queensland remains cyclical, however, the Qld Major Pipeline Projects indicated that if currently, unfunded projects proceed, we could be heading for a boom period.
The average growth over the next 4 years is expected to be almost 3.5% in building and construction.
The timing couldn’t be better with the fair work commission handing down the new minimum wage ruling at $20.33/hour effective 1st July 2021.
There is no question the ripple effects are continuing to be felt in most industries particularly in construction and development, but the news is good.
Based on current statistics and projections, all roads point to a strong and bright future. With a reputation for being one of the most adaptable and resilient industries, the construction sector is bouncing back and on track for positive growth moving forward.
Globe Group has worked hard to remain strong through recent tough times and has continued to act as vital support to our long-standing and casual clients.
We as a team have managed to fulfil bookings and continue to meet day to day demand, lifting pressure from the variety of businesses and companies that have engaged us.
As we move into the final quarter of 2021, Globe Group is focused on consistently providing excellent customer service and helping fill the labour-hire gap.
If you are a business or company looking for support either casually or ongoing call us today. There has never been a better time to partner with the experts in construction labour hire.
If you are looking to get into the construction industry, we want to hear from you.
Get in touch now and let’s talk.
For more information or to partner with Globe contact us on (07) 3625 9999 or email us at email@example.com