08 Nov Australian Construction: Maneuvering Through an Economic Roller Coaster
Just when we thought the Australian construction industry is at its best, the stock market crashes. Not just the usual crash, but a significant fall that, if continues to persist, can mean a shaky year for construction companies. Construction is Australia’s 3rd largest industry, employing about 9% of the workforce, but houses keep getting more expensive by the year. Demand for housing is ever present, but then comes the question of timing: buy now or buy later?
The Age Challenge
According to Australia Health 20181, life expectancy for those born in 2016 is 80.4 years for boys and 84.6 years for girls. That equates to greater demand for accommodation for senior people in the future–a challenge to builders and designers to create age-friendly spaces and more affordable housing. Not too mention that houses that can outlive the occupants and can be passed on to the next generation will never go out of buyers.
When you ask Aussies what kind material they want for their house, brick is no doubt the leader. Brick companies readily took on the task of providing products that can fit the demand for contemporary design–color variations, textures, and brick material (glass bricks, anyone?). The construction industry, particularly the part that services majority of homeowners, know the advantage of a brick house in terms of maintenance, durability, and safety. Choosing materials wisely remains to be a key factor in keeping construction companies afloat.
Real Estate Costs
Owning a house in Australia is expensive enough, but the gap between housing costs and purchasing power seem to be an impossible space to fill these days. Interest rates may have lowered, but future homeowners are even more hesitant to close a deal. When you see real estate postings that omit house costs, it makes you think that agents might be trying to avoid underquoting, which raises more doubt if it’s the right time to make a purchase. This affects the construction industry, especially in terms of workforce management. How many staff can you afford to keep? Is outsourcing a worthy option?
Flexibility is becoming an important skill in navigating through economic turbulence. The ability to adapt and decide base on priorities can be a driving force for your company’s survival. Whichever way the construction industry goes, it’s going to be an endurance test for all.