Cracks in home building sector rattle Australia’s economy
At the height of Australia’s residential property boom two years ago, Sydney builder Toby Searle couldn’t get carpenters and bricklayers to return his phone calls, such was the demand for workers.
Now he can’t stop them ringing. “All of a sudden we were getting emails, phone calls, people coming to site and dropping business cards off just looking to get a foot in the door,” he said. “Some guys would be struggling out there.”
Demand for new building work has slowed to a crawl, with home building approvals in May plunging to six-year lows, in concert with tighter lending and a sharp slide in home values.
The pullback, in a construction sector that employs nearly a tenth of the national workforce, is weighing on the faltering economy just as the central bank puts unemployment and underemployment at the top of its list of hard-to-fix problems.
Then there is the knock-on effect, as the dwindling appetite for building ricochets through the supply chain, slowing land releases, crimping sales in timberyards, and driving layoffs from labour hire firms to engineers and architects.