E30 Building Construction

Big projects putting home target at risk

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Original article by Michael Bleby
The Australian Financial Review – Page: 25 : 9-Nov-23

Property developers and builders have warned that the pipeline of publicly-funded infrastructure projects will make it hard to achieve the federal government’s revised target of 1.2 million new homes by 2029. This target is already uncertain, given that the number of housing starts fell to just 40,720 in the June quarter, which is its lowest level in a decade. Master Builders ACT CEO Michael Hopkins notes that the house construction sector is competing with infrastructure projects for the limited supply of labour. He adds that the construction sector will require an additional 500,000 workers nationwide by November 2026, including 7,000 in the ACT.

CORPORATES
MASTER BUILDERS’ CONSTRUCTION AND HOUSING ASSOCIATION OF THE AUSTRALIAN CAPITAL TERRITORY

Slowdown in home building costs to help ease inflation

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Original article by Nila Sweeney
The Australian Financial Review – Page: Online : 12-Oct-23

CoreLogic’s Cordell Construction Cost Index for the September quarter shows that there was just 0.5 per cent growth in construction costs, making it the lowest since 2015. CoreLogic research director Tim Lawless says that growth in construction costs could ease further in coming months, which could lead to lower inflation; he notes that housing has the biggest weighting in inflation measurement and the cost of new residential owner occupied homes is the largest component of the housing segment.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD

HOUSE CONSTRUCTION – ECONOMIC ASPECTS – AUSTRALIA,[SPACE]INFLATION (FINANCE) – AUSTRALIA]

Builders hit a high for insolvencies

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Original article by Michael Bleby
The Australian Financial Review – Page: 28 : 3-May-23

Data from the Australian Securities & Investments Commission shows that an additional 71 businesses in the construction sector were declared insolvent in April. There have now been 1,672 construction industry insolvencies so far in the current financial year; this is the highest level since 2014, when 1,802 companies collapsed during the equivalent period. The Association of Professional Builders’ co-founder Russ Stephens says the construction sector has been too dependent on cash flow, with many firms facing financial problems once cash flows started to decline.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, ASSOCIATION OF PROFESSIONAL BUILDERS

Construction insolvencies approach decade high

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Original article by Michael Bleby
The Australian Financial Review – Page: 29 & 31 : 19-Apr-23

Data from the Australian Securities & Investments Commission shows that there were 524 insolvencies in the construction sector in the March quarter and 1,601 in the first nine months of 2022-23. Australian Restructuring Insolvency & Turnaround Association CEO John Winter says the number of insolvencies in the sector is on track to exceed the decade-high of 1,802 recorded in fiscal 2014. He adds that the residential construction sector is suffering a severe hangover after years of a surge fuelled by cheap credit.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN RESTRUCTURING INSOLVENCY AND TURNAROUND ASSOCIATION

Construction costs rise at fastest pace since 2005

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Original article by Michael Bleby
The Australian Financial Review – Page: 29 : 9-Feb-22

CoreLogic has warned that residential construction costs are likely to rise further in the March quarter, citing factors such as ongoing supply chain disruptions. The firm’s Cordell Construction Cost Index rose by just 1.1 per cent in the final three months of 2021, compared with 3.8 per cent in the September quarter. The index rose by 7.3 per cent in the year to December, its highest annual increase since March 2005. Tim Lawless of CoreLogic says the big rise in annual construction costs might increase the cost of new homes and renovations, which may in turn put upward pressure on inflation.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD

Contractors face crunch on cash flow

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Original article by Michael Bleby
The Australian Financial Review – Page: 1 & 6 : 19-Jul-21

The New South Wales government has imposed a two-week shutdown on construction across greater Sydney as part of its response to the COVID-19 outbreak. Shopping centre developer and owner Scentre Group responded to the shutdown announcement on 17 July by advising that it would close construction sites and place a halt on all shop fitouts at its Westfield centres across greater Sydney, while Multiplex closed all five of its construction sites in Sydney. BuildCorp boss Tony Sukkar says most companies within the construction sector should survive if the shutdown only lasts for two weeks, but things would become more problematic if it is extended.

CORPORATES
SCENTRE GROUP – ASX SCG, BROOKFIELD MULTIPLEX LIMITED, BUILDCORP COMMERCIAL PTY LTD

Grocon on brink of administration

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Original article by Ben Wilmot
The Australian – Page: 13 & 14 : 23-Nov-20

Troubled construction company Grocon was said to be in talks over the weekend of 21-22 November about the appointment of administrators, although no move has yet been made. Grocon has been involved in a number of disputes in recent times, including with Infrastructure New South Wales, against which Grocon has launched a $270 million legal action. Grocon head Daniel Grollo recently said that its creditors would be "first in line" to be paid if it wins its action against Infrastructure NSW. Grocon’s latest problems relate to a project in Melbourne, where it is said that sub-contractors are owed around $8 million. Grocon is building a tower for Impact Investment under a fixed-price contract, and claims that it has not been paid by Impact since May.

CORPORATES
GROCON PTY LTD, INFRASTRUCTURE NEW SOUTH WALES, IMPACT INVESTMENT GROUP PTY LTD

Construction down by $5b over two years

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Original article by Michael Bleby
The Australian Financial Review – Page: 39 : 5-Nov-20

The Australian Construction Industry Forum has forecast that construction activity will fall by 3.2 per cent in 2020-21 due to the impact of COVID-19. Construction work in the accommodation sector is tipped to fall by 34 per cent, while a 23 per cent decline in entertainment and recreation projects is expected. However, the ACIF expects an increase in construction work in the industrial property, health and aged-care sectors. Activity in the residential construction sector is expected to remain subdued for several years, but growth in home renovations is forecast.

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AUSTRALIAN CONSTRUCTION INDUSTRY FORUM

Building shortages threaten site shutdowns

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Original article by Rosie Lewis, Ben Packham
The Australian – Page: 6 : 10-Mar-20

Australian Shop & Office Fitting Industry Association CEO Gerard Ryan says its members are looking at delays to projects of up to six weeks because the corona­virus outbreak is delaying the supply of products from overseas. The outbreak has also prompted calls for a national security strategy to boost the nation’s stocks of medicine and fuel. Industry Minister Karen Andrews says the federal government is looking to increase local manufacturing to help ease supply chain disruptions, although she says she is hearing anecdotally that "the supply chains are OK".

CORPORATES
AUSTRALIAN SHOP AND OFFICE FITTING INDUSTRY ASSOCIATION

Builders and developers struggle with supply shortages

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Original article by Nila Sweeney, Michael Bleby
The Australian Financial Review – Page: 9 : 3-Mar-20

Australian builders and property developers are having to deal with disruptions to projects as a result of not being able to get supplies from China due to the coronavirus. A lack of elevator parts and components is of particular concern to builders, with WT Partnership Australia executive director David Stewart noting that any delays in having a building’s lift installed has a knock-on effect in terms of the rest of the building schedule. Supply-chain problems can cause delays of up to $200,000 a day on the biggest building sites.

CORPORATES
WT PARTNERSHIP AUSTRALIA