Last week, Slattery spoke to all major contractors on the Eastern Seaboard discovering that productivity is still over 80%, trade prices are reducing, supply issues are minimal and life on site is adapting to mitigate the impact of COVID-19.
We were uplifted by conversations with Tier 1 and 2 leaders, demonstrating that our industry is incredibly resilient with the comradery between contractors and sub-contractors at an all-time high. We are seeing contractors adapt to the ‘new normal’ by implementing split shifts, staggered meal breaks and increased hygiene practices.
While safety on site has always been front of mind for Australian contractors, companies have introduced even stricter protocols with reduced numbers of people in hoists, hand sanitiser on site and increased site facilities to distance workers. Site visits are being conducted virtually in real time, reducing the number of physical visitors.
Earlier this year, projects were affected by supply issues from China. We understand this is no longer a major problem, with minimal supply issues now arising from China. However, issues are emerging with supply from Europe, particularly for facades and lifts. Another common concern is the potential for material hold-ups on arrival if Australian wharves strike or are shutdown. One positive to come from this uncertainty however is that we are hearing contractors are sourcing more than ever from local suppliers.
While the private sector is showing signs of slowing with several residential projects going on hold, we are hearing that state government and local council work is on the rise. We have witnessed an increase in health projects, support for Council projects and we have confidence that transport & infrastructure work will accelerate during this time.
While the industry is demonstrating resilience, it is early days and we expect competition for fewer jobs in the short term may put downward pressure on pricing. Although price reductions are welcome, clients need to be cautious with contractors and subcontractors who underquote to keep their workforces employed. This could lead to financial strain and potential insolvency.
For now, the industry is adapting well, and we are cautiously optimistic that if sites remain open, most contractors will ride out the impacts of COVID-19 and be ready to face the next challenge with the same rigour and resilience already shown.