Construction key to economic growth
In recent years, the building industry has been an important contributor to the Australian economy. At a time when other countries have struggled with the fallout from the 2008 Global Financial Crisis, the strong performance of our mining, resources and construction sectors has made a significant and positive difference to our economic position and outlook.
2016 saw peak activity in residential construction, with a record number of approvals for houses and apartments during the course of the year – but can this level of activity be expected to continue? What does the future hold for the building industry in 2017 and beyond?
Positive sentiments from latest MBS survey
Every quarter, the Master Builders’ Association surveys members about their current experience and expectations of the construction industry. The latest results, released in December 2016, report business confidence at its highest in over two years, with a significant lift in the prospects of non-residential construction for the year ahead. In fact, the index for future construction is now higher for non-residential than residential. This indicates that a drop in house and apartment completions in the coming year, after the record highs of 2016, could well be outweighed by an upturn in non-residential building activity.
The growing problem of labour constraints
With the majority of indices on the rise – including business prospects and profit expectations – it seems the industry is expecting the building boom to continue. Although business owners have strong intentions to take on more staff, a shortage of skilled trades may be putting the brakes on industry growth. The labour constraints index rose by 13% in December 2016, to reach the highest level recorded since the survey began 10 years ago. If the construction industry is to capitalise on continuing demand, this skill shortage will need to be addressed.
Sources: https://www.masterbuilders.com.au/MediaLibraries/MB/National-Survey-2016/National-Survey-Dec-2016.pdf
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