The turmoil caused by Omicron caused the construction industry to shrink during the summer vacation, reversing the November recovery. Construction Index Australia Performance..
The index dropped 11.1 points in December and January to 45.9, with measurements less than 50 indicating contraction of activity, with lower results meaning faster contraction.
Peterburn, chief policy adviser for the Australian Industrial Group, said the decline in commercial building and apartment construction reported the worst decline in activity, and the decline in housing construction was not so dramatic.
“This recent recession was caused by the labor supply, material supply, and disruption of business and household confidence associated with the rapid expansion of Omicron stocks,” said Burn.
As the labor supply continues to be in short supply, construction costs will continue to rise, and both wages and material costs will rise rapidly. However, the acceleration of input prices in December and January was slightly lower than in November, and the index was down 1.5 points to 96.
“Builders and constructors hope that the apparent reduction in COVID-19 infections in the last two weeks will ease some of the additional constraints apparent in the last two months, but everyone else. As well as dealing with further uncertainty and variability, “Barn said.
Tom David, an economist at the Housing Industry Association, said the HomeBuilder pipeline has only recently begun to reach completion and much more will come.
“Continuous demand as part of the changing preference of homebuyers for more space and larger amenities will keep builders busy until 2023,” he said.
Mr David said the Reserve Bank of Australia reiterated its “patience” willingness to raise interest rates at its first board meeting this year on Tuesday.
“The first RBA cash rate hike is expected to officially mark the end of the current boom,” said David.
Meanwhile, the Australian Bureau of Statistics (ABS) released another statistic in December showing an 8.2% increase in housing approvals.
This is due to a 27.5% increase in approvals for private homes, excluding homes. New South Wales unit approval was the main driving force, with a 121% increase in December.
However, housing approval declined in all jurisdictions except Western Australia and increased to just under 1% in Western Australia.
“Private sector housing approval fell 1.6% in November, then fell 1.8% in December and continued to be curtailed. The series has fallen 31.5% since its peak in April 2021.” ABS director Daniel Rossi said.