Engineering construction projects in Australia are currently at their lowest level since 2008, according to the latest release from Master Builders Australia, with bushfires and the COVID-19 pandemic wreaking havoc on construction projects.
The economic realities of the pandemic have left many holding onto their wallets tightly, with fewer and fewer projects currently in the pipeline. Master Builders Australia has said that according to the latest data from the Australian Bureau of Statistics, construction volume is down year-on-year by 6.5%, and currently at volumes not seen in 12 years since the global financial crisis.
Shane Garrett, chief economist at Master Builders has said that “the volume of civil construction work done fell again in the first three months of this year, sagging to its weakest quarter since the middle of 2008.”
“The first quarter of this year was scarred by bushfires at one end and the rapidly deteriorating COVID-19 crisis at the other. In this context, it is not surprising that construction activity struggled in some areas,” Garrett added.
“However, the fact that engineering and civil construction are still struggling so badly is disappointing. This is the part of the industry that should be growing in light of the prominence given to infrastructure delivery by governments over years.”
Australia’s most populous state, New South Wales reported a 8.1% reduction in construction activity, while the Northern Territory dropped a staggering 18.3% reduction. Queensland and Tasmania reported no sizable reduction in the March quarter, while the ACT, Western Australia, Victoria and South Australia reported gains of 5.3%, 4.4%, 3.2% and 1.1% respectively.
“Household and business confidence is likely to remain weak for some time as a result of COVID-19. The building and construction sector will be more reliant than ever before on government-initiated projects across education, health and transport infrastructure in order to keep going.”
“Master Builders Australia recently published our proposals on reinvigorating Australia’s economy and recovering the losses wreaked by COVID-19. If our ideas were implemented, EY’s modelling indicates that 105,000 full-time jobs would be created right across the economy. There is an urgent need for this to happen,” Garrett concluded.
We’ve covered the MBA’s call for a $13 billion injection into the building and construction sector, which you can read here. As a brief overview, the MBA used modelling from Ernst & Young showing that an investment into the sector could result in around $30 billion added to Australia’s GDP, and the addition of around 100,000 new jobs, on top of curbing the unemployment rate of the roughly 1.2 million Australians employed in the sector.