Is the Construction Industry on the Gold Coast Dying?
In 2008, the global recession hit construction industries around the world. Particularly affected were industries in the UK and US, with sky-rocketing job losses and plummeting levels of productivity. Australia, however, emerged from the crisis relatively unscathed. This is due to a few shrewd investments in construction on the part of the government. For the most part, Australian construction has been on the rise, with many exciting projects in the pipeline. The Gold Coast, however, is lagging behind this growth, and many experts believe that its construction industry is dying.
What are the Facts?
Reports reveal a substantial dip in the earnings of the Gold Coast Construction Industry. In fact, statistics disturbingly show a one-third reduction in productivity in just three years. This study was commissioned by the Urban Economic Institute of Australia, and form part of a larger examination of the Economic Impact of the Development Industry. Its research also reveals a 1.2 billion dollar decline in Gold Coast earnings from 2008, marking 1400 jobs lost.
The report shows that the Gold Coast is the worst performing region in construction in Australia. This is followed by Queensland. However, the Gold Coast’s overall losses figure is 13% greater than that of Queensland.
The social and economic impact of the construction industry’s decline on the Gold Coast has been catastrophic. This is because a large percentage of the population is reliant on construction for jobs and income. Over 33, 900 residents are directly employed by construction companies, which constitute the second largest employer in the area. People who do not live on the Gold Coast, but who commute there daily in order to work in construction, have been similarly hit by the industry’s decline.
The Master Builders Association of Queensland reports that approvals for construction on the Gold Coast are down by 80%. This means that the area is in the worst shape it’s been in for over 30 years. The chairman of the MBAQ, Graham Cuthbert, believes that the main inhibitors of growth could be attributed to a stunted demand for projects and the high cost of materials. He says that the situation is serious, because for every one person who is employed directly in construction, there are another five you are just as reliant on the industry. This refers to curtain manufacturers, tile makers, carpet makers, interior designers, kitchen installers and hot water suppliers, to name a few.
What can be done?
Experts suggest that changes to the Gold Coast construction industry cannot be brought about by government endeavours alone. Stimulus packages may have been effective in helping the country as a whole, but the Gold Coast requires more investments from other sectors of the economy.
Cuthbert would like to see the involvement of banks in the resuscitation of the Gold Coast Construction Industry. He believes that they should lend money to people who would like to build new homes, but lack the confidence and resources to do so. Others agree with this theory, and note that Gold Coast citizens need more market confidence in order to put money back into the construction industry. After all, they say, the only way from rock-bottom is up.