The Australian Institute of Architects has called on the Australian Government to establish a construction sector supply chain strategy that addresses the shortages and unprecedented price rises impacting the nation’s building and construction sectors.
The Institute’s National President Shannon Battisson said Australia’s building and construction sector was facing ongoing supply chain strain leading to escalating materials prices and shortages.
She said the current situation was having a major ripple effect beyond the collapses of construction businesses through to the broader economy, with adverse impacts for housing supply and affordability.
“Australia has experienced the largest ever increase in input prices for house construction since the ABS started collecting data collection in 1996,” she said.
“Nationally this was 17.3% for the 12 months to June 30 and in Melbourne it reached 20%, according to ABS data.
“We also know that there is a significant shortage of construction trades.
“Labour costs have also increased due to governments’ stimulus measures, the rebuilding of communities in NSW and Qld affected by the floods, on top of the accumulation of outstanding work in Victoria from last July’s storms, repeating flood events in Sydney and bushfires over the past two to three years.”
The Institute has written to Treasurer Jim Chalmers and the Minister for Finance Katy Gallagher calling for the October 2022 Budget to establish a national supply chain strategy for building and construction materials, components and fittings so that Australia’s building and construction supply chain is less vulnerable to pandemics, disasters or overseas conflicts.
“Both sides of politics recognise how important construction is to our Australian economy and for jobs,” she said.
“Not surprisingly this is where a lot of stimulus funding was targetted in 2020 as the pandemic took hold.
“That immediate crisis has passed, and we now look to the government to use all of its levers to de-risk collapse and create a supply chain strategy that gives the Australian construction sector much greater resilience both now and into the future.”
The previous Morrison-led Coalition Government established the Supply Chain Resilience Initiative (SCRI) and subsequent Sovereign Capability Manufacturing Plan (SCMP) but these only addressed a highly select range of critical products such as medicines and agricultural chemicals.
Ms Battisson raised concerns for construction companies and independent builders.
“The Institute is very concerned about the labour issue. We are confident that the construction sector, unions and government can collaborate to create short- and longer-term strategies to address skills shortages,” she said.
“From our corner of architecture that there is an opportunity to increase the low representation of women in construction trades and professions. This conversation begins early at home and in schools, but is also important for any women contemplating career change.
Ms, Battisson also noted that the Architecture profession was also facing its own pressures in respect of skills shortage over the longer term.
“We approached the previous federal government with a detailed proposal to subsidise architect practices to employ our architecture graduates – who need their 3,300 hours of supervised employment as a requirement for undertaking the Architecture Practice Exam in order to attain their registration. However, this fell upon deaf ears. We are losing our future architects as a result,” she said.
For architects the construction supply and labour shortages and associated prices increases and volatility also have daily impacts including:
- Project delays. This is of particular importance when Architects are also administering a building contract and extension of time or cost claims clauses may become activated.
- Project estimates. Providing accurate project construction cost estimates when clients do not wish to engage the specialist services of quantity surveyor.
- Needing to source alternative materials. Notwithstanding the original principal’s project requirements brief, materials shortages may also require Architects to work with the client and/or contractor to seek appropriate compliant materials and products substitutions.
- Business impacts. Price increases to total construction costs as well as increased time spent in contract administration and sourcing alternatives may have impacts on financial performance of an Architect’s practice.
