Construction helped the economy during lockdown - now Government needs to help keep it humming.
Posted on Jun 22, 2020
There’s been a lot of discussion about the impact of the decline in economic activity on construction. We wanted to understand the impact of this recession on our industry and to assist you to plan.
We engaged economic analysis firm ACIL-Allen to forecast what the industry will likely experience in the short, and longer, term.
The research shows a decline by $291 million or 8.6% of economic activity over the next financial year, with a loss of over 2,000 jobs. The economic insecurity we were seeing at the start of the year, made worse by COVID-19 and the resulting reduction in people moving to Victoria has all combined to depress growth.The (attached) report was commissioned Incolink, engaging leading economic modellers ACIL-Allen to give us a forecast of what the industry will likely experience in the short, and longer, term.
“The impact of COVID-19 has been significant and we’re not out of the pandemic yet, however this analysis shows even without a second wave we face job losses,” Mr Erik Locke, CEO, Incolink said.
“These figures should provide added incentive for the State and Federal Governments to work together to ensure the industry has a pipeline of work. That pipeline must include not just residential alterations and home building and significant transport projects but a range of work in the middle of the market. Government can facilitate the approval of more multi-level apartments, package up social housing and ensure the industry keeps building jobs,”
“The lack of immigration and economic impact of the pandemic are coming together to put at risk the strong growth in jobs and investment that’s been undertaken in construction, especially in Victoria. When construction declines it has flow on’s into other industries and reduces taxation revenue for the States,”
“As the workers’ safety net Incolink is committed to its worker members and working with employer associations and unions to advocate for our industry,” Mr Locke said.
Mr Locke has written to the Victorian Treasurer Tim Pallas about this research and is actively working with the Government on their response to the slow down.
You can see the full report here.