Another tough year ahead, says Master Builders chief

2020 will continue to be challenging for the building and construction industry in Queensland, but there is light at the end of the tunnel, according to Master Builders. Master Builders Queensland deputy chief executive officer Paul Bidwell said statistics from 2019 painted a clear picture of a tough year, with the forecast for 2020 looking equally as tough. Sweeping legislative reforms, including those introduced into State Parliament this week, would continue to have an impact and contribute to rising costs, he said. “Building work completed during the year to September 2019 was down 9.2 per cent over the previous year, totalling $20 billion. Almost two thirds of this was residential building work (approximately $13 billion), with the remaining $7 billion commercial building work,” Mr Bidwell said. “It’s not all doom and gloom – we did have some bright spots during the year with alterations and additions and government buildings up 10.9 per cent and 24.3 per cent respectively. “While these are strong numbers, they only represent a small portion of the overall work and they can’t hide the fact that the majority of Queensland’s building industry, who work in new houses, units and private sector commercial buildings, is struggling. “Across the state, housing starts were down 26 per cent on the previous 12 months, with 32,611 new dwellings commenced over the year to September 2019.” Looking ahead, he said 2020 would continue to be challenging but signs of a turnaround were expected as the year ends, as pent-up demand begins to push through to projects on the ground. Master Builders Queensland deputy chief executive officer Paul Bidwell. “On the commercial front the news is good where in 2020 we’re forecasting an increase to commercial building – up 7.3 per cent from the 2019 estimate to $7.8 billion, mostly on the back of government expenditure on public buildings,” Mr Bidwell said. “The retail sector will continue to decline before strengthening in 2021, while the reverse is true of education buildings as the government’s new schools investment program comes to an end. Demand for industrial buildings is also expected to be strong, while demand for offices will bounce back in 2020. “Beyond 2020, modest growth in commercial building work is anticipated, climbing to $8 billion in 2023.” In the residential sector, Master Builders is forecasting 31,000 dwelling commencements in 2020, down 6 per cent from the anticipated total of 33,000 dwellings for 2019,“However, we expect that early into 2021 a recovery will be underway, which will strengthen into the foreseeable future," Mr Bidwell said. "We’re forecasting 35,000 commencements in 2021, increasing to 40,000 by 2022. Over this time, we expect alterations and additions to continue their strong trajectory." Mr Bidwell said the revamped Minimum Financial Requirements that Queensland’s building businesses must now meet were causing grief for tens of thousands of licensees. "It remains to be seen whether these businesses can comply with the new laws by the end of 2020 and what action the building regulator takes against those who can’t,” he said.In mid-2020 the Queensland Government intends to introduce the next phase of its controversial Building Industry Fairness legislation. While there are some positive changes, by and large it will be to the cost and detriment of many builders and trade contractors.“All in all, it’s set to be a tough year for the industry.” https://www.i-q.net.au/main/project-trust-roll-out-to-squash-dodgy-dealings

Another tough year ahead, says Master Builders chief

Industry Queensland

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