We see a few construction trends that will continue to challenge the industry for the best part of 2023; and whilst there are some headwinds there are also some great positives and silver linings on the horizon.
See below the 5 most important construction trends in Australia for 2023.
1. The Supply Chain
The supply chain issues of 2022 appear to be minimising with global factors such as normalised supply and demand, oil and gas pricing off their highs, the US dollar closer to normal levels and a reopening of China all suggesting a more orderly supply of products in cross trade globally.
The Ukraine situation, whilst far from over, is a least at a point where the rest of the world has re-calibrated and negotiated their supply chains to accommodate for it.
2. Inflation and interests
Rapid and high inflation and the resulting interest rates growth appear to be flattening out to a controllable level and the central banks are slowly putting the brakes on interest rate rises. Some are even hinting at a slow reversal of this process as early as 2024.
3. Cost of contracts
On a local front in Australia, some mid-tier and smaller construction companies have run into trouble and have gone down, due to the higher costs and contracts locked in prior to the inflation and supply chain issues. This is a very unfortunate situation and has impacted on hundreds of customers and suppliers.
4. Rental demand
Also, on the local front the rental demand has never been higher with rental stress in every state and in both capitals and regions and the housing supply is at an all-time low.
This is even before the full impact of immigrants back up to the government’s setting of 195,000 per annum or the influx of temporary student numbers, especially from China, now that it is reopening.
It is only a matter of time before the investors, developers and even governments move to build and create more housing; shelter being a necessary and fundamental need for everyone.This will flow down to the construction sector, albeit after a short interest rate fuelled lull.
One other big one is the re-set from inner city-based apartments to stand alone dwellings, typically with room for a home office, multiple living areas and some more outdoors space.
This has increased renovation construction, knock-down and rebuilds in the capital cities and a shift to regional areas, especially now that work from home in some shape or form is continuing post-COVID.
As the renowned demographer Bernard Salt says; “Generational shifts mean for example that millennials will enter “family formation”. That is, they’ll move to an area where they can buy a bigger house and will increase demand for goods and services.”The big increase in renovations typically involves all trades including plumbers, carpenters, electricians, tilers, kitchen and bathroom cabinet fitters, AC fitters and glaziers as well as all the external trades.
The need or opportunity for an increase in the use and purchase of line and dot lasers in this space is enormous and with the whole new range of iMEX line lasers for every trade, 2023 could well be a record year for laser purchases.