Construction industry braces for coronavirus impact

Both the Australian Construction Industry Forum (ACIF) and Master Builders Australia have flagged the serious fallout of the coronavirus for Australia’s construction industry.

ACIF has urged industry and government collaboration to address the growing disruption to construction projects as a result of the coronavirus.

The most pressing issue is the reduced supply of building products from China. According to data published in The Australian, China is the largest supplier to Australia of glass (accounting for 56.4 per cent of all imports); nails, screws, nuts and bolts (41.4 per cent); taps and valves (27.3 per cent) and iron and steel (23.3 per cent).

“With more than 60 per cent of the $6 billion worth of construction-related materials sourced from China, this represents a massive challenge for the industry if supplies continue to be affected,” says ACIF Executive Director James Cameron.

“Some builders and contractors are putting in requests for extensions of time for delays to their projects. This is contractually not always easy, as many contracts do not provide illness as a reason for a claim.”

The industry could also be affected by international travel restrictions on employees travelling to and from China.

“Where there are large components of structure, facades, and fit-out in contracts, these usually require visits to suppliers’ factories in China,” says Cameron.

“Most major developers and builders are looking for alternative sources for Chinese building products, looking at alternatives to sending staff to China, and looking to find quality assurance specialists in China who can do inspections for them.

“The construction labour force in Australia may also be affected due to the disruption to the migration of certain trades and professions needed for the industry.”

And ACIF notes there may be further implications for the local construction industry if the coronavirus spreads widely to the domestic workforce.

“If the coronavirus takes hold in Australia, construction projects may be further affected, with sick staff and others staying home due to fear of infection,” says Cameron.

“The construction industry labour force is highly integrated, and one missing link can mean that projects cannot continue.”

In the face of these looming concerns, ACIF has made an urgent call for planning and collaboration.

“ACIF calls on industry and governments in Australia to collaborate to address all of these current and looming challenges,” says Cameron. “Let’s act proactively and be on the front foot to minimise the impact of this tragic outbreak of COVID-19 on the construction industry.”

Master Builders Australia CEO Denita Warn has echoed … ACIF’s concerns, saying that the next month will be “make or break” for the industry.

In an interview on Sky News, Warn pointed out that the disruption is affecting building materials as well as the supply of parts for locally made products.

“We know from the feedback from our members that not only are we having problems in sourcing supplies directly from places like China, but also that manufacturing has ground to a halt in some instances across the country, because the parts they rely upon are not being brought in from China,” said Warn.

“We’ve been advised by those on the ground that the next four weeks will be make or break. We’re concerned for the next three to six months about what that does on construction sites.”