22 January 2019
A CHALLENGING year is the forecast for building and construction in 2019, with the latest Australian Bureau of Statistics revealing a 2.1 per cent drop in building approvals as 2018 drew to a close.
The drop is a continuation of the fall from the highs experienced in 2016, and comes ahead of what’s predicted to be a year of daunting legislative changes for the industry.
It’s a grim story across all of Queensland, with Master Builders Deputy CEO, Paul Bidwell attributing the dip to tightening in lending requirements.
“We expect the residential sector to slip slightly from the 42,000 commencements in 2018 to 40,000 in 2019. Worryingly, the drop will be largely in the detached housing sector, with the impact to be felt across the state,” Mr Bidwell said.
“Tightening in finance requirements is largely to blame; however, we hope this is a passing phase, due to solid underlying market fundamentals of employment growth, rising wages and a rising population growth rate.
“While regional Queensland was looking up in 2018, this has also begun to turn, with regional areas particularly vulnerable to tightening lending conditions.
“On the flip side, there are some large scale resource and renewable energy projects and the tourism sector is performing well, which should drive some construction demand and prevent a return to the grim conditions from which the regional industry has only just emerged.”
The non-residential building activity is also expected to fall and construction in the retail and wholesale trade sectors is set to decline significantly over the coming year.
“The tourism and office sector will also fall away. However, there is some good news for commercial builders in the health, aged care, industrial and transport sectors,” Mr Bidwell said.
“But as well as dealing with tricky economic conditions, the industry will need to cope with a wave of legislative change.
“It’s clear that Minister Mick de Brenni is determined to introduce Project Bank Accounts into the private sector sometime in the second half of 2019.
“Master Builders is also expecting the state government to continue with the next tranche of additional reforms. This includes the introduction of new Minimum Financial Requirements, a shake-up to building certification, mandatory Continuing Professional Development and further refinements to the non-conforming building product regime. These changes, all of which will make it a challenging year for the building industry to tackle.
“Our message to the state government will be to consider the outlook for our industry when making any further policy decisions.”
% change over MONTH
Total current 12 months
Total previous 12 months
% change over YEAR
Downs & Western
Wide Bay Burnett
Mackay & Whitsunday
Far North Qld
Source Master Builders & ABS
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