Competition Tightens for Construction Jobs as Market Decline Continues

Construction employment had its steepest decline in nearly six years last month, with April statistics confirming a ninth straight month of contraction.

The Australian Industry Group/Housing Industry Association Performance of Construction Index revealed further weakening across the construction industry, with housing, apartment and commercial construction all declining.

Apartment construction was the lowest performing sector for April, a trend that continues to influence developers to convert planned residential projects into commercial buildings.

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The report acknowledges “a strongly competitive quoting and tendering environment” has had a flow-on effect to builders, who are competing to secure work in a declining market. This has placed subsequent pressure on profit margins, affecting many Australian construction businesses.

Engineering construction experienced a mild upturn with new public infrastructure contracts commencing. With new tender opportunities expected to follow from the results of the upcoming election, the sector has a more positive outlook than the residential market.

“Although engineering construction is likely to remain an area of relative strength for the industry on the back of spending on large-scale, long-term publicly funded infrastructure projects, there is little sign of any near-term improvement in overall industry conditions,” said Ai Group head of policy, Peter Burn.

HIA Economist Tom Devitt echoed the sentiment that the residential sector downturn would continue to negatively affect construction employment.

“The home building pipeline is shrinking as the number of new home approvals slows. As this pipeline of building work slows back to a new steady state, there will be an impact on employment in the building sector,” he said.

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