A Building Bust Is Fast Approaching
Newcastle Herald
Tuesday February 22, 2000
THERE can be no doubt that the success of Sydney's bid to stage the Year 2000 Olympics has been good news for the building industry.
It has created an insatiable demand for skilled and unskilled construction industry workers.
Who can blame the workers for making the biggest bales of hay possible while the sun shines brightly?
As a result, in the early hours of Monday morning the F3 Freeway is almost choked with all manner of truck and utility as workers head south, lured by constant work and big dollars.
But the issue has a downside. The current boom must be followed by a significant bust and the time for that bust is fast approaching.
The financial pleasure is already being countered by pain.
The Hunter has been left almost bereft of tradesmen.
So serious has the situation become that master roof tilers are being made ludicrously inflated offers to stay in the region.
What we're seeing is the combined effect of the pre-Olympic building boom coupled with the pre-GST rush to complete projects.
Both will come to a grinding halt well short of the Year 2001.
In fact by September we can expect to see a significant downturn in the building industry.
While projects delayed as a result of pre-Olympic fervour will remain to be done, activity will be tempered by the extra costs flowing through from the new tax system.
Expect then to see some of the bigger players in the industrytopple and fall.
Expect to see the smaller players left shattered by the collapses.
The industry has few if any safety nets.
At the end of the day it's the family that wants a quality home for a reasonable price or the businessman who needs a new building or factory space to accommodate growth who is left to pick up the tab.
The current excesses are nothing more than a silver cloud with a very grey lining.
© 2000 Newcastle Herald