The ‘Infrastructure beyond COVID-19’ report has promising data for recovery, released December 2020. The 189 page report looks in depth at the figures for infrastructure around Australia and the undertone of the report is positive.
Australian construction market report estimated the pandemic of 2020 triggered a $5b reduction in construction and building projects, with industry expecting to recover to pre-COVID-19 levels by 2023.
With this lockdown in Sydney specifically affecting construction with a harsher 2 week shutdown, we can expect those projections to be pushed out a number of years.
Value of building and construction work in Australia, by type (FY16-25F)
Office (31%), health care (16%) and education (14%) are the largest components of non-residential building, in FY20
Residential building
Non-residential building
Engineering construction
There is little doubt this will negatively affect jobs and business revenue, profit and cash flow
Without stimulus the road back to growth could be a long one.
AFR Infrastructure Australia – COVID-19 Impact Survey from September 2020 shows worrying signs for the outcome of this shutdown.
Around 25-30% of businesses surveyed claimed to have experienced significant declines of over 20% in cash flow, revenue or profitability.
The construction and building sectors saw improved business confidence in late 2020.
The 2021 construction showdown could have severe influence on business confidence going into 2022. The further away from lockdowns we get, the better the outcome on overall confidence.
While the data from the COVID-19 impact survey and Infrastructure reports look promising, this new wave of lockdowns and shutdowns is without doubt going to need to be paired with stimulus to recover to pre-pandemic conditions.