QUEENSLAND’S building industry is arguably busier than it has ever been, even despite the recent lockdowns, as well as the changes for those crossing the NSW border for work – and that’s a first-class problem to have. However, the unprecedented level of activity is coming at a cost.

Material delays and soaring costs are continuing to tighten their grip on the industry, and the biggest worry is that some businesses will collapse by the time Christmas rolls around.

Off the back of the surge in work created through government stimulus like HomeBuilder, record low interest rates and interstate migration, the industry is scrambling to keep up with demand. This of course is all being played out against the backdrop of international and domestic supply chain delays, and price hikes, both born out of the pandemic.

Our latest Master Builders member survey paints a dire picture for both builders and trade contractors.

The June survey puts the spotlight on the long lead time builders are facing every day, just to get their hands on critical materials to complete their work.

100 per cent of respondents told us they’re facing wide-ranging delays on timber – 40 per cent waiting more than a month. Delays to access steel is also reaching a critical level.

The shortage in supply is also playing out in price increases, with one in four respondents being slugged with hikes of more than 25 per cent for timber and roofing materials, and ten per cent on steel.

Materials make up around 60 per cent of a building’s cost, with labour accounting for the other 40 per cent. Crunching the numbers, these hikes mean the average cost of a new home in South East Queensland could jump by up to $30,000. In many cases, that increase couldn’t be passed on from the builder to their customer, meaning they’d be forced to try and absorb the jump themselves.

Our legal team is constantly fielding calls from worried members, like those who have signed on to complete a $400,000 contract for example, but the cost of materials like timber has jumped by $30,000 – and the builder is bound to deliver that contract on time and on budget.

However, there are a lot of builders struggling to do that. While some might have scraped through last year, timber is expected to go up by 30 per cent on 1 September, and 20-25 per cent again on 1 November, after already rising by 50-60 per cent in the last nine months.

The other issue is the availability of tradies, with two out of three builders surveyed saying they’re waiting more than a month for roof installers, while steel workers, tilers, carpenters and bricklayers are not too far behind.

Confirmation that Queensland is set to host the 2032 Olympic Games is welcome news for the industry in terms of a longer-term pipeline of work, but the fact the Games are so far off is definitely a positive.

Industry can only absorb these skyrocketing prices and delays for so long – and unfortunately, we’re predicting this situation could explode in our faces around September and October. We’re hopeful the shortages situation will start to resolve itself after that.

The COVID emergency in NSW, which saw the state government shut the local industry down, was tough to see. As we write this piece for Sourceable, the South East Queensland industry remains largely open, but with some restrictions not seen during previous lockdowns.

It has cemented the importance of supporting the industry in Queensland as the key to keeping the state’s economy moving. Our research shows building and construction would haemorrhage $761 million each week if it was forced to down tools, impacting more than 232,000 employees and over 77,000 businesses state-wide.

It’s our industry that will be the foundation of preparations for the Games – so we need support from the Palaszczuk Government to bolster it for the future.

We welcomed the state government’s opening of the Accelerated Building Consumer Dispute (ABCD) framework back in June. Builders and consumers both need help when the situation goes beyond mediation, through no fault of their own.

Right now, we’re in talks with Minister Mick de Brenni’s department on a permanent rapid dispute resolution process for the residential sector, similar to what’s available to commercial builders, in the hope of providing a fair and speedy resolution when these challenging conditions see projects go south.

The building and construction industry is in danger – and we need to find ways to flip the hourglass before time runs out.

By Paul Bidwell, Deputy CEO, Master Builders Queensland