Queensland’s Infrastructure Pivot

Queensland’s construction industry is always changing. Public infrastructure construction has now moved into prime position. What does that mean for residential and commercial building? Watch our explainer video or read on to find out.

Not since the GFC has Queensland’s construction industry faced so much uncertainty.

In 2008, the industry began its pivot away from a rock-steady period of residential and commercial activity, toward an unprecedented ramp-up in engineering construction driven by massive mining investments. Within five years, residential and commercial building work had fallen by as much as 40% as the heavy and civil sector crowded-out the builders and tradies.

No slump lasts forever.

By 2014, Queensland had launched itself into a residential building boom – albeit one that was concentrated on apartments in the south-east corner. That boom ran unabated until 2016, at which point a definite ‘pop’ could be heard among apartment investors.

Now, we change tack once again. The slide backward from the heights of the apartment boom was gradual at first, and then rapid. We have not found the bottom yet, and it’s likely to take another year before we do.

 

Construction Work Done

 

The construction industry in Queensland will continue to grow. It always does. But the money driving the growth now will not be residential developers; it will be governments spending-up big on public infrastructure.

In short, it’s a good time to be in the heavy and civil construction game. But as building activity continues to fall from the boom years of 2014-2017, many are getting nervous about the implications for jobs in the trades.

We are already seeing Queensland’s trade industry reducing its headcount. Over the course of 2018, employment in construction services businesses fell by some 40,000, or nearly a quarter of the workforce.

It’s important to note that not all of these workers were laid-off. Many businesses seeking to reduce headcount simply do not refill positions when workers leave voluntarily.

Another common strategy is to reduce hours rather than employees. The building boom meant long hours for many tradies, with nearly a third of them putting in 45 or more hours per week. Those long-working tradies now number substantially fewer.

While the downturn in building activity may soon find its bottom thanks to looser lending restrictions and probable rate cuts, a return to the boom years is very unlikely. A halt to the falls followed by low-and-slow conditions is the likely outcome.

The bottom line is that the next few years will see more utes chasing less work. This will not mean unemployment for most, but many will be facing fewer hours and lower rates.

Now is the time to look at upskilling. Future proof your career with subsidised training from CSQ.