Fears of second wave of job losses as corona virus crisis hits the Australian building industry. Residential and larger builds are being put on hold while architects report canceled projects worth $5bn. The wave could hit the Australian economy as activity in the construction and building industry slows and residential projects dry up.
Trades are reporting that residential projects are being put on hold as home-owners worry about their job security and cash flow, while unions warn that some larger construction projects are being put on ice, particularly in NSW.
Federal Labor estimated on Thursday that new housing starts in the residential sector could fall from 160,000 to 100,000 as people shy away from committing to major projects.
Architects have also reported widespread cancellation of projects.
A survey by the Royal Australian Institute of Architects of 300 architecture practices at the end of March found that 89% had had projects cancelled or put on hold. The survey included both small and medium practices.
The cancelled projects were worth a total of $5bn, the survey found.
The construction and property sector accounts for one in four jobs in NSW and about 8% of GDP, disproportionately larger than in other economies. For these reason, governments have often targeted stimulus packages to the sector because they yield significant flow-on effects through the economy.
The NSW president of the Master Builders Association, Brian Seidler, said a survey of members last week found the corona virus crisis was starting to affect both large and small projects.
Labor’s housing spokesman, Jason Clare, warned that the slowdown would not become apparent for some time.
Most large construction sites around the country are still operating, but the national secretary of the Electrical Trades Union, Allen Hicks, warned the corona virus was having serious impacts.
He said Westfield and Google were among large companies that had put projects on hold in NSW, and more pain was ahead.
Many contractors cannot demonstrate the fall in revenue required to access the jobkeeper program, even though they face serious problems in a few months.
Hicks said that many construction workers were employed as casuals or through labor hire companies and moved between employers, even though they were effectively employed full time.
This meant they would be ineligible for jobkeeper once stand downs occurred because they could not demonstrate 12 months continuous employment with one employer. This meant trades would be forced onto jobseeker and might be lost to the industry.
On Thursday the opposition leader, Anthony Albanese, called on Scott Morrison to consider a major investment in social housing.
Both the Victorian and NSW governments have said they are looking at bringing forward “shovel-ready” projects.
The NSW planning minister, Rob Stokes, announced $70m of support for parks and major drainage works in the North-west housing areas, and the transport minister, Andrew Constance, has said his department will consider bringing forward transport projects.
On Thursday, Morrison and the treasurer, Josh Frydenberg, appeared to downplay the industry’s concerns.
Morrison said the best way to keep people off jobkeeper and jobseeker was to “keep the pace up” on projects and that the federal government would work with states to “put the pedal down on future projects”.
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Fears Of Second Wave Of Job Losses As Coronavirus Crisis Hits Australian Building Industry
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