Engineering construction, largely driven by mining and gas developments as well as associated rail, port, pipeline and road infrastructure, has reportedly overtaken residential building as the most important source of work and jobs for the construction industry.
ACIF said activity in the non-residential building sector, smashed by the global financial crisis in 2008, is unlikely to recover to pre-GFC activity levels for several years, with this sector’s long-term share of GDP trending down for the foreseeable future.
Major cities show little signs of short-term recovery, except Brisbane and Perth, where vacancy rates and rental growth are offering opportunities for new CBD office building developments.
Such conditions are leaving builders, trades and others in the metropolitan areas under huge pressure to find work, and tender prices for commercial building work across the country are falling.
In Sydney alone, the spread of tender prices is reportedly around 25% to 30%, an indication of the state of mind of builders as they struggle to win work to keep their doors open.
“The impact of this degree of change in our economy is having upon jobs is plain,” said ACIF executive director Peter Barda.
“Businesses are not taking on apprentices in the numbers that they used to, leaving no one to train the thousands of young Australians wanting to join the industry.
“The long-term impact on the skills and labour within our industry will be significant.”
Barda said those who had looked to commercial building for work were struggling and would need to look to engineering construction, if they could, to keep their doors open.
This article first appeared in ILN's sister publication ConstructionIndustryNews.net.