The Sydney Building & Construction Industry - Is there cause for concern?
There are murmurs of fear and discontent rumbling across the Sydney Building and Construction Industry. But is it all bad? What can we do during these challenging times to come out of the other side in better shape than ever?
With wage growth having stagnated over the last 12 months and the industry shedding 50,000 jobs – there are certainly reasons to be concerned right now.
What is the overall outlook?
A survey by the Australian Constructions Association found that the value of private sector non-residential construction is set to reach a six year high of $142.8bn
With lower investor demand and a number of projects completing, revenue for multi-level units was expected to decline by 4.8% before a sharper drop of 17.6% in 2019-20.
Australian PCI noted a drop of 10% in their index for July. This comprised of another steep decline in residential construction and a continued slowdown in commercial construction – representing the sharpest monthly contraction in six years. Engineering construction remained steady although there were accompanying reports of project delays and a decline in new tender opportunities.
Are we turning a corner?
The benefits of the governments $6bn commitment to the education sector is really being felt now
The majority of the shock to the residential sector has now been absorbed by the market with the peak ending in 2016
Large scale infrastructure projects are set to continue for many years
The RBA seem committed to keeping interest rates
Whilst still high, cost pressures are starting to ease – unit prices dropping 7% in July.
Rather than focussing on everything that is challenging in the current environment, we should be looking at the current market as an opportunity to review our current businesses and how we have structured them.
The white collar Construction job market has been very challenging for employers for the last few years. However, now is a good time to re-evaluate that.
It represents value because of the following:
More realistic wage expectations
Candidates are more focussed on stable businesses with a reliable pipeline of work and a reputation for successful delivery
Higher proliferation of previously ‘uninterested’ exclusive candidates
Well run businesses prosper – therefore Net Promoter Score becomes a key metric
Current trading conditions are certainly not cause for a non-stop fiesta. However, by looking at the potential opportunities and the taking advantage of the conditions and they way your business is run – you can build for the future and join the inevitable bounce back in better shape than ever.
If you would like to get in touch and discuss any hiring requirements, get in touch with the team on +61 (2) 8252 1101.