Urgent Stimulus Required for Construction Industry

4 November 2020

The ACA is calling for Government to fund and bring forward construction projects, prioritising strategically planned, well-timed projects, supported by effective procurement processes and equitable contract terms.

The Association of Consulting Architects’ (ACA) recent Pulse Check survey of 511 architecture practices found that the total construction cost of delayed and cancelled projects due to COVID-19 is significant – a total of $10 billion across the responding practices, comprised of $4 billion of cancelled work and $6 billion of delayed work. When extrapolated across the larger industry, these figures point to serious economic challenges for the country. The ACA is calling for urgent government stimulus to fund and bring forward projects. This will create a pipeline of work that will ensure the economic health of many businesses working within the built environment. 

Architects are frequently described as canaries in the coalmine for the wider construction industry. Recent commentaries in The Conversation and the Financial Review warn that the diminishing pipeline of work in a high number of architectural practices will have the inevitable flow-on effect of a shortage of projects ready for construction in the coming years. This will have a major impact on the sector as a whole, which is a substantial driver of the Australian economy.

The survey also found that the reduction in projects is also causing much concern within practices, with enormous stresses mounting for senior management and concern for mental wellbeing, especially in smaller practices.

The JobKeeper program has provided welcome relief for many, with a high proportion of practices reporting that this program has prevented stand downs and redundancies. However, with the reduction of JobKeeper and impending conclusion of support, there are serious concerns about future security and the impact on employment within the profession.

Unfortunately, many architects who took the Pulse Check survey do not expect a significant positive impact from the recently announced Federal Budget initiatives. Some practices anticipate taking advantage of the instant asset write-off, but few see this as having a major impact. The JobMaker program has little relevance in a sector that employs highly trained and skilled workers, and will not offset the impact of reduced JobKeeper.

It is not too late to prevent a major economic slump in construction and create confidence in long-term community benefit and the health of the industry. The ACA is calling for stimulus to bring forward properly planned projects to start now! Architects need to be employed in the first stages of the project design and documentation. This will set up a pipeline of projects that can then be strategically released for construction. If this process is finely calibrated it can extract optimal value for all. To make this happen, priority should be placed on project planning, risk reduction, better procurement, equitable contract terms, and more efficient approval processes.

 

For Interview/Comments:    

John Held
ACA National President 

E: natpres@aca.org.au
M: 0417 840 337 

 

Angelina Pillai
ACA Chief Executive Officer 

E: angelina.pillai@aca.org.au

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