2016 outlook for building industry
The building and construction industry has traditionally been one of the largest employing industries in Australia. We take a look at industry predictions for this year and what that means for you.
Employment in the building industry
Australian Construction Industry Forum reported in its November 2015 forecast that overall employment in the industry rose by 1.4% to 1,043,000 jobs. This was largely due to the labour intensive residential projects which peaked last year, after a steady increase over the last few years. This growth acted as an offset for the decline in engineering construction projects.
Employment in the non-residential sector is declining with a reduced number of projects. This is suspected to continue to decline by a forecasted amount of 1.4% until June 2016. After that, non-residential construction jobs are expected to increase again.
Master Builders National Survey in December 2015 revealed positive results on the job front, indicating “builders are likely to lift employment levels in the period ahead.”
Residential building peaks
2015 saw the peak of the residential housing market with 186,000 completions over 2014-15. This amount was much higher than anticipated due to the extremely low-interest rates nationwide. However, 2015 marked the end of the rise and recent statistics surrounding new residential building approvals suggest a decline in new houses in the coming years.
While this may seem problematic for jobs and the health of the industry, it will allow opportunities in other areas. As homeowners become more reluctant to sell or build new homes, renovation jobs will naturally increase providing more opportunities for tradespeople.
Non-residential buildings fell last year and are set to continue to decline over the coming year. However, keep a look-out for sub-sectors including Health and Aged Care, Offices and Retail and Wholesale Trade, as non-mining investment begins to grow. There are forecasts for growth in these sectors over the coming years.
Overall, this sector has maintained its decline since its peak in 2012-13 at $129 billion. The initial investment phase of Australia’s mining boom ended decreasing nationwide activity. However, major infrastructure implementations in the urban transport sector are set to increase revenue for engineering construction somewhat balancing out activity.
What does this mean for the business industry?
Economists commenting on the industry slowdown suggest longer term trends are more important to watch. While the industry will cool a bit in 2016, a JP Morgan economist has been quoted saying,” that’s not necessarily a bad thing given that we’ve seen quite a lot of construction in the past two years.
“Perhaps a bit of moderation, a bit of a pull-back, is what that sector needs at the moment and is the best thing for financial stability going forward.”
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Entering the construction industry with CTI
Construction Training Institute offers a range of apprenticeships and RPL skills assessment options to kick start your career in this dynamic Australian industry. For more information on our offerings or to find out more about the above statistics contact a CTI team member today.