Construction jobs casualty of property market downturn

The Australian 12:00am May 8, 2019

Turi Condon

The housing downturn is flowing through to job losses in the construction sector with employment in the industry falling at its steepest rate in nearly six years, according to the Australian Industry Group/Housing Industry Association construction index.

Activity in the construction industry weakened further in April with the index falling 3 points to 42.6 for the month. Readings below 50 show falling activity. Employment fell 6.9 points to 39.2.

“The housing and apartment sectors both remain firmly in negative territory and commercial construction recorded a ninth month of contraction,” Ai Group head of policy Peter Burn said.

Weakness in the sectors was partially offset by an expansion in engineering construction on the back of large-scale publicly funded infrastructure projects. But Dr Burn said there was little sign of any near-term improvement.

“There are now strong signs that adverse conditions in the broader construction industry are flowing through to sections of the services and manufacturing sectors,” Dr Burn said.

HIA economist Tom Devitt said home building remained in a delicate position. “Tighter lending conditions and weak consumer confidence due to falling house prices continue to constrain the market,” Mr Devitt said.

Homes sales prices in April fell at their sharpest rate in six years, down 9.6 points to 31.8, according to the index. Apartment building was again the weakest sector, up 1.8 points to 33.4, while house building continued to struggle, up 0.1 points to 36.4.

Building material and other costs fell, down 2 points to 73.3. Cost pressures remain a concern due to high energy costs and relatively high prices for commodities and imported construction materials, AIG and HIA found. Wages grew, but at a slower pace, down 3.5 points to 55.7.