Building supply chain

There is some good news in this crisis for the construction supply chain.

Suppliers of concrete, cement, steel, windows, bricks, wood and cladding all are reporting good stock levels in Australia.  Australian based factories and logistics are operating as normal.

There are some hold ups and delays emerging for some items but for the most part an alternative can be sourced or an Australian based manufacturer can ramp up production.

The Queensland building industry uses many imported building products (particularly taps, valves, glass, nails, screws, nuts, bolts, iron and steel).  We are already seeing factories in China come back on online.  Supply out of Europe and the US remains difficult.

Over the coming months there will be the challenge of price hikes on imported products following the fall in the Australian dollar. Some manufacturers sourcing materials from overseas are reporting price hikes in the order of 10-15 per cent within the next two months.

Panic buying isn’t necessarily restricted to consumers. We’ve had reports from some builders who are experiencing issues sourcing products like ovens, with stock levels plummeting overnight for products that were in stock just the day before.

The rush on purchasing of disposable masks, which are used within the industry as a control measure for silica dust, has also had an impact on the building industry. Read more about the availability of disposable respirators from the Queensland Government.

While the true impact won’t be known for months, we anticipate it will most likely be felt in the second half of 2020. The impact will be felt in both commercial and residential sectors; neither is immune.

Building material imports

Master Builders Australia has provided some preliminary numbers on the import dependence of the Australian construction industry.

As the table below shows, the majority of building related materials are produced in Australia. Import dependence is strongest in relation to ‘Ceramic Products’ (41.3%). For glass, the import dependence is about 30%.