The Australian economy was officially declared in recession this week, with the announcement of a record 7 per cent drop in GDP for the June quarter – the largest fall in quarterly GDP since records began in 1959.
According to the Australian Bureau of Statistics (ABS), the plunge in GDP was due to the combined effect of the pandemic and the community and government responses to it. The worst affected sectors were transport services, vehicles and hotels, cafes and restaurants; however, construction also took a sizeable hit, with an 8.2 per cent drop.
Not surprisingly, there have been immediate expressions of concern from the building industry – and calls for government measures to provide support.
“Our industry is confronting forecast declines of 27 per cent in home building activity and around 17 per cent in commercial construction over the next 12 months,” says Master Builders Australia CEO Denita Wawn.
“This will have a devasting impact on the nearly 400,000 businesses, the 1.2 million people they directly employ, and negatively impact thousands more in the building supply chain and wider economy.”
Master Builders has called for “bold action” from the federal government in the budget, which is now just over a month away.
“We want to see stimulus and policy measures that support economic growth,” Wawn says. “Investment in building and construction activity that gives back to the economy.”
Master Builders Australia has proposed measures including:
- A CommunityBuilder grants scheme to activate and bring forward demand for building services through the federal government assisting community groups and not-for-profits with the cost of construction of new facilities and substantial maintenance of existing ones
- Extending the life and expanding the scope of the highly successful HomeBuilder grants and First Home Deposit Scheme
- Introducing accelerated depreciation on capital works over the next two years for all property types
- Fast-tracking construction pre-approved civil and social infrastructure
- Funding to provide training and jobs to young people and new hope and opportunity to those whose jobs are displaced by the economic crisis
- Complementary tax and regulatory reforms that lighten the load on business to maximise the effectiveness of government spending.
On September 14 the ABS will be publishing a paper titled “A series of unprecedented events – the June quarter 2020”. This will bring together stories from across a range of economic statistics, and may shed more light on the impacts in the construction sector, and for other professionals working in the built environment.