Covid is doing a number on the Aussie construction industry

Australian industries have been slammed hard thanks to the restrictions put in place to deal with the coronavirus pandemic, and the construction industry is no exception. That particular industry is expected to contract by 5.7 percent this year, made worse by the fact that global oil prices have plummeted, again due to coronavirus. The official labeling of the construction industry as “essential” has done little to help.

Much of the decline is due to a dearth of residential construction as hundreds of thousands of Australians lose their jobs each month and can no longer afford to take on mortgages or even pay rent. According to the Australian Bureau of Statistics, a record-setting 594,300 jobs were lost in April alone. The unemployment rate now stands at 6.2 percent—the highest in five years.

Jason Clare, the housing spokesperson for Labor, said last month that the worst is yet to come for the construction sector.

“About a million Aussies are involved in building houses for other Aussies, but as construction on houses wraps up over the next few months, the construction pipeline for new work is drying up,” he said. “And that means there’s a real risk that, for a lot of electricians and plumbers and carpenters around Australia, they could be out of work.”

Dhananjay Sharma is a construction analyst at GlobalData. He told International Construction that the industry was already on the skids when the virus struck.

“Australia’s construction industry has been on a severe downturn, which will be compounded by the outbreak of Covid-19 and the subsequent negative impact on the economy in 2020,” he explained. “The historic fall in oil prices and the resultant cutback in investment decisions on new projects by oil producers will worsen the situation in the Australian construction industry.”

Canberra is well aware of this danger, of course, and has earmarked $89 billion for infrastructure over the next seven years.

In NSW, the government is relaxing some of the limitations imposed on construction sites; work can now be done on weekends and public holidays, for instance. It’s also waving license fees for building contractors for a year. And $7.89 billion-worth of construction projects were just approved in the state, and there are plenty of Equipment Hunt Excavators for sale.

The construction sector is particularly crucial in NSW, where, along with the property sector, it provides 25 percent of jobs and 8 percent of GDP.

“People are wary about starting a kitchen because they worry that the industry will have to pull up stumps and they are stuck at home,” said Brian Seidler, NSW president of the Master Builders Association. “It’s impacted from the large commercial sector right through to small jobs.”