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Construction Feels Brunt of Lockdown Restrictions

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Australia’s construction industry felt the brunt of Covid lockdowns with activity dropping sharply in July and one-in-three workers in Sydney still unable to get on site.

This was the first time since September, 2020 the industry slowed down, according to the Australian Performance of Construction Index.

Sudden disruptions to deliveries, employees getting stood down, supply delays and price hikes were felt on sites in New South Wales and Victoria.

The rest of the country reported mild expansion in construction activity, however, lockdowns in Queensland and the ongoing situation in NSW should affect August results.

HIA chief economist Tim Reardon said the reported levels of building activity fell 14.4 per cent.

“Restrictions on builders working onsite have caused building activity to contract sharply in July,” Reardon said.

“Despite these lockdowns, there remains a record volume of new detached home building and renovation work to be undertaken, when restrictions ease.

“For builders in other regions, their main challenge remains keeping up with the large volume of work. Capacity constraints will remain a major challenge for at least the rest of this year.

“The exception to this is apartment construction, which continues to feel the adverse impact of constraints on migration.”

Construction scores for July

ScoreChange from June
Australia PCI48.7-6.6
Activity40.4-14.4
Employment60.82.5
New Orders 49.5-6.6
Housing Activity54.1-3.1
Apartment Activity 35.0-5.3
Commercial Activity 52.9-0.1
Engineering Activity49.2-3.9

^Source: Australian PCI - HIA, Ai Group

The Australian PCI took responses from construction businesses nationally—results above 50 indicate expansion and higher or lower scores indicate the pace of change.

Ai Group head of policy Peter Burn said the index was impacted by both the lockdowns and “a robust nine-month expansion” in the industry.

“New orders were broadly flat across the construction industry with the further slump in apartment orders balancing continued, though slower growth in the rest of the industry,” Burn said.

“The outlook over the next couple of months will depend heavily on the paths of the Covid-19 outbreaks and the extent of restrictions.”

In NSW, work construction sites resumed on July 31 in a limited capacity while “areas of concern” were still closed.

Shape Australia group executive people and culture Kate Evans said the eight lockdown areas equates to roughly one in three Sydney construction workers who are unable to work on site.

“We are seeing this figure mirrored across our own team,” Evans said.

“Many staff were lucky and had the ability to continue with work remotely.

“However, for those that didn’t have enough work to do virtually at this time, we encouraged these employees to use the two weeks to focus on personal growth, learning and development.”

The commercial fit out company with nearly 500 staff across Australia dealt with Melbourne restrictions last year.

Evans said they were able to keep staff on but it it was equally important for construction companies to look after staff members’ mental health during this time.

Meanwhile in Queensland, where the number of delta-variant Covid-cases remained under 20 a day, unoccupied construction premises were still operating and only essential construction was continuing at occupied sites.

Usual restrictions on heavy vehicles in the CBD were also lifted, to push the sector while traffic levels were lower.

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Article originally posted at: https://www.theurbandeveloper.com/articles/lockdowns-interrupt-construction-boom