Is your business in the construction industry? Then you'll be interested to hear that the Australian Construction Industry Forum (ACIF) has published their forecasts for the remainder of 2016.
With a six per cent drop in overall activity across the industry, the ACIF suggests that spending on both the business and public sector is shifting significantly. But what exactly is happening in the commercial environment at the moment?
What the industry is doing
Last month, the construction sector dropped to a 20-month low on the Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (PIC).
This, according to Ai Group Head of Policy, Peter Burn, indicates a clear decrease in activity for each sub-category in October.
"The decline of engineering construction into negative territory reflects the vulnerability of the sub-sector to the concentration of activity in transport infrastructure in the south eastern corner of the country," he suggested.
To offset the slowing of major mining and energy sector projects, Burn mentioned an obvious scope for infrastructure spending growth. Moreover, according to HIA Senior Economist, Shane Garrett, the Index' findings also suggests residential building peaked and is likely to see significant drops in activity over the coming years.
Key findings of the Australian PIC
Below we've summarised some key points from the index:
- After two months of recovery-signs, the sub-index activity contracted in October, going hand in hand with new order numbers slowing as well.
- Apartment building in particular decreased substantially and is now 9.5 points down to 39.9.
- Wages in the construction industry grew while input prices stayed elevated. However, the sub-index of selling prices indicated intense profit margin pressure.
- At the same time as commercial construction declined, so did engineering construction after two months of positive growth.
- Employment in the industry stabilised after September, seeing a sharper rate of supplier deliveries for the month.
Now while these statistics might paint a bleak picture, they also encourage organisations to recalibrate their focus. Instead of remaining in the same position within the industry, improving efficiencies and emphasising streamlined processes is evidently more important than ever.
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At SRO Technology we provide professional advice without brand-agnosticism. So, if you want to make sure your measurement instruments and equipment are not only up to snuff but allowing you to stay ahead of the competition, get in touch with us today.