Industry leaders say the fate of manufacturing in the building and construction sector is largely in government hands.
It’s been a tough few months for Australian construction: social distancing rules have stymied work on some building sites, while the grim economic outlook has caused developers to freeze major projects indefinitely. But take a step back and the prospects for the sector look more positive.
“Leading up to the COVID-19 crisis, there was quite a body of infrastructure work that was already on the books,” says Mark Cain, chief executive of the Australian Steel Institute (ASI). “Now, we’re seeing governments take the initiative to pull forward large, shovel-ready infrastructure projects such as tunnels, freeways, airports, school buildings and social housing, to help the economy bounce back.”
Local, state and federal governments are all digging deep: in the ACT alone, the government has committed $35 million to fast-track the delivery of what it calls ‘screwdriver-ready’ projects, while larger jurisdictions such as NSW are promising billions in new money, funding the construction of dams , railways and more.
Federally, programs such as the 米乐体育M6app下载ing Better Regions Fund are pumping hundreds of millions into drought- and fire-affected areas.
Industry looking up?
Although not all building-product manufacturers have been able to avoid pandemic-related losses (Brickworks, for example, recently made 200 of its 1300 staff redundant ), Cain says those who have “toughed it out” should start seeing the benefits of government infrastructure investment within weeks. “We’re optimistic that, as we come out of this pandemic, there will be a robust demand for steel,” he says.
His counterparts – such as Dave Gover, CEO of the Engineered Wood Products Association of Australasia (EWPAA) – are similarly hopeful. “Certainly, the sentiment from our members has become significantly more positive in the past month,” says Gover.
Pandemic aside, Gover says 2020 is shaping up to be a transformative year for EWPAA members. The growing popularity of mass-timber construction (that is, construction for which timber plays a structural role) is providing opportunities for Australian building-product suppliers to step up.
“Projects like King Street in Brisbane and International House at Barangaroo [in Sydney] are proving the viability of mass-timber construction in Australia,” says Gover. “In the global context, mass-timber construction has been slowly building for the past 20 years but here it’s still a relatively new opportunity.”
The ASI’s Cain cites the increased use of light-gauge steel, plus advances in bespoke pre-fabrication using 3D laser scanning, as evidence that the domestic steel sector is continuing to innovate. And he says steel manufacturers that are working to reduce their carbon footprints stand to gain the most.
“Sustainability is becoming increasingly important and that’s being driven by our customers,” says Cain. “Big picture, there’s interest in using hydrogen as a reductant rather than coking coal and in replacing blast furnaces with alternative technology. That technology is still years away, but it’s an indication of the direction we are moving in.”
Innovation is key
Rodger Hills, executive officer of the 米乐体育M6app下载ing Products Industry Council (BPIC), says Australian building-product manufacturers have historically innovated out of necessity.
“Competition with overseas suppliers is fierce and as a result there are lots of local groups doing exciting things, from major manufacturers like Brickworks through to small, family-run manufacturers,” he says.
But Hills says the domestic industry has been hamstrung over the years by successive governments who have failed to enforce the World Trade Organisation’s Technical Barriers to Trade (TBT) rules.
“Those rules are designed specifically to allow signatory nations with free-trade agreements to maintain a competitive manufacturing base and to ensure product conformity,” he explains.
“Unfortunately, there’s been a non-existent enforcement regime at the federal level and it’s allowed non-conforming building products into Australia, which has eroded the local market.”
When COVID-19 hit, BPIC recognised that a major shock to the industry was unavoidable. “So, we wrote directly to the relevant ministers, explaining the TBT issue again and urging them to fix it. We’ve received what could politely be called very evasive replies. There seems to be no political will on the part of the current government to solve the issue.”
Gover, from the EWPAA, says TBT enforcement is a hot-button topic for his associates. “Our members recognise that we need to operate in a competitive world; they just want the rules of competition to be the same for all the suppliers in the market,” he says.
Hills says domestic building-product manufacturers will need to continue innovating to remain commercially viable as the country rebounds from COVID-19. “Because local suppliers can’t match the imports on price, one of the few ways they can compete right now is to come up with new, innovative products,” he says.
Innovation and continuing federal and state government support are shaping up as the biggest factors in the future success for Australia’s home-grown building-product suppliers.
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