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What's happening in the Building & Construction Industry?

What can you do to prepare your business for the next 12months and beyond?

It’s an extremely busy time for the Building and Construction Industry who have prospered from the wreck of Cyclone Debbie, the mining boom and locals spending again and now Government Stimulus through the Household Resilience Program, the $25k Home Builder Grant, the $15k First Home Owner Grant and the $5k Regional Home Building Boost Grant.

 

Numbers provided by the Master Builders to the end of August 2020 are much are par with the same time last year however we know from discussions with our building clients that the next 9 months is going to be extremely busy.  To get the Home Builder Grant, the house contract must be signed between 4/6/20 and 31/12/20 with the slab poured within three months of signing the house contract.  In other words, if a house contract is signed late December 2020, the slab must be poured by the end of March 2021 with the remainder of the work likely to take the build through to June/July 2021. 

 

Land sales in the last quarter have been significant with a local developer indicating they had sold 60 lots last quarter compared to selling 5 lots at the same time 12 months ago.  We have also heard reports of many of the land developers selling unfinished lots to be completed by 31 December with clauses in their contracts that the land sale will fall over if the land isn’t completed showing an extremely strong demand for land and new homes in Mackay.  We have a builder client with contracts for 50 houses that have to have slabs down by 31/3/21.  Just about every builder has seen an enormous increase in signed building contracts in the last couple of months and there is very little titled residential land remaining. Given that a lot of land sales are happening right now, we are conscious that there may be a slowdown in building in 12 months’ time with not as much land available and eager residential clients bringing forward the timing of their home build to cash in on the Grants available.

 

Like most businesses in Mackay at present, the building trades are struggling to find workers to meet the demand in the new home market and finding it difficult to attract works to Mackay given that the entire state is benefitting from the building grants.  It wouldn’t surprise us if we see our building trades having less time off over the Christmas break to get through the volume of work.

 

The commercial sector is suffering and the industry is in discussions with the State Government to start new commercial projects to boost the sector.  Our clients are telling us that every commercial tender is being jumped on by all the builders and is very competitive with low margins.

 

Commercial land sales are slow however the commercial agents are reporting very little commercial rental shed space with hardstand being available particularly in Paget.

 

We recommend building trades should also plan for cost increases in their supplies, possibly of up to 15-20% in some instances, caused by the effects of COVID.

 

What can you do to prepare your business for the next 12months and beyond?

  • Sure up your supply chain to ensure you can deliver your product within the available time
  • Ensure your QBCC turnover is adequate for the work to be undertaken
  • Don’t overcommit by taking on too much
  • Consider the wet season and its effect on your delivery/promises
  • Think long and hard about what time off you will take this Christmas with so much work on
  • Put something away as times will most likely be slower in the second half of 2021

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