The COVID-19 pandemic has caused a "profitless building boom" across the country and created a labour shortage at the same time; which was accelerated by international boarder closures leaving Australia short of skilled labour for over 2 years. We are now seeing the end of this boom with sharp declines across various building sectors. Prefabrication can provide some solutions to the labour shortage and other challenges but more on that later.
The Australian Industry Group reports in their latest media release (05 July 2022):
The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) fell by 4.2 points to 46.2 in June, indicating contraction in activity across the construction sector following months of positive or stable conditions (readings below 50 indicate contraction in activity, with lower results indicating a stronger rate of contraction).
It is to note that the Australian PCI® already fell by 5.5 points to 50.4 in the previous month!
Australian PCI® – Key Findings for June 2022 further highlight:
Three of the four construction sectors – housing, apartments and commercial – were in contraction in June. All saw activity fall significantly from the previous month.
House builders reported higher interest rates constraining new orders, which again fell in June.
Labour shortages and delays in supplier deliveries continued to constrain activity. Builders reported ongoing concerns about increases in inputs (including fuel) and labour prices.
The rising cost of construction puts further pressure on housing companies. Builders face rising cost at a pace of about 15 per cent per year. Steel prices are 42 per cent higher than last year, timber is 21 per cent higher, electrical products are 14 per cent more expensive and the cost of bathroom fixtures has risen by 13 per cent.
And there seems to be no end in sight. The Financial Review quoted consultancy Macromonitor's new report in May stating that "the construction sector inflation will hit 9.5 per cent over the year to June 2022, and 6 per cent over the year to December 2022."
Fixed-price projects that started in 2021 create the biggest challenge for builders as delays and rising material cost created a backlog of work with little or no profit. The recent collapses of several larger and smaller building companies confirmed that.
It's fair to say that the industry is facing a very challenging time.
In the middle of crisis, lies opportunity.
A crisis brutally highlights systemic weak points. And herein lies the opportunity. An opportunity to rethink the way buildings are being built, to take measures to have more control over cost and the supply chain and to tackle labour shortage. It is the perfect time to be thinking of cost and time-effective ways to battle the rising costs of labour and building materials.
How prefabricated building solutions could address a lot of the current pain points.
The use of prefabricated construction methods could be one of these solutions, providing not only efficiency to deliver projects in full and on time but also certainty of quality.
Prefabricated methods help to control cost and minimise waste by confirming deliverables up-front and accurately calculating the materials required to build elements such as wall panels, floor and roof cassettes as well as mezzanine levels. Once produced, the components are shipped to site and assembled.
Zen Haus' #prefabricated #building #system provides fully insulated (external and internal) wall panels including:
Preinstalled façade options
Preinstalled double glazed windows
Preinstalled electrical conduits and cutouts for power points, light switches and home automation
The fast assembly - 3 crane days for a single storey dwelling - allows builders to achieve lockup much quicker which helps with their progress claims process and most importantly, allows to deliver the projects usually earlier in comparison (with conventional building methods).
The closed roof cassettes not only provide an instant working platform but immediately protect the building from the weather. A full roof structure is installed in about 2 hours and allows the roofer to finish it off.
Other obvious advantages of utilising prefabrication include less traffic on site, improved health and safety, the elimination of defects by stringent quality control processes and rigorous testing at the factory. With these control steps in place, the highest possible quality is guaranteed resulting in significant cost savings on future maintenance.
Further efficiencies throughout the building process can be achieved by adding more prefabricated elements to a build. One of the most labour intense areas in homes is the bathroom. If built conventionally, a staggering twelve trades are required to finish a bathroom. By opting for bathrooms pods, this number is reduced to 1.
If planned and managed correctly, the same crane (required for the wall assembly) can lift a bathroom pod into place. Only a plumber is required to connect the pod(s) and test the connections.
In conclusion, whilst Australia's construction industry faces challenging times and experiences skilled labour shortages, projects can still be delivered on time by leveraging the most effective methodologies.
Want to know more about our Prefabricated Building System?
Contact us: info@zenhaus.com.au