A warm welcome back to everyone in the Glue Executive network.
As our first post in 2020, I thought I would provide a brief forecast for the year ahead, based on recent publications from The Master Builders Association, (MBA), Global Data Analytics, The Property Council of Australia and WT Partnership.
Residential Construction:
MBA review of recent data puts new home building at their lowest since early 2013, however with credit constraints lifting and house prices trending up, they expect to see an improvement in these figures.
This is inline with the Property Council’s March 2020 quarter survey highlights, which had positive news, for the first time in 18 months: residential construction activity has moved back into positive territory and are at their strongest levels in NSW since the December 2015 Quarter.
In short residential is coming from a low level but it is expected to gain momentum over the coming 12 months. In particular, from a talent perspective we have seen an upturn in the requirements with clients for Estimators in this space.
Engineering Construction and Infrastructure:
MBA data points out Engineering construction has shrunk for four consecutive quarters, however marginally moved forward during September 2019 quarter, which is a welcome change.
In line with MBA ‘s view, Global Data Analyst, Danny Richards, expects the engineering industries output value in real terms to rise at a compound annual growth rate of 2.14 percent from 2019 to 2023, compared to -1.59% during 2014 to 2018.
WT Partnership is also predicting continued strong growth in the engineering sector the next two years, driven by $100 billion of infrastructure investment by the Federal Government, as well as the NSW Government $87 billion capital program up to FY 2022.
In summary we expect the market for talent to intensify in this space and have seen an uptake particularly on the civil engineering side, with it remaining challenging to find experienced civil engineers on both the consulting engineers and contractor side.
Commercial and Industrial:
Commercial building has been a strong performer over recent years. Shane Garrett, Chief Economist with the MBA, points out that the Sept Quarter was the second highest on record. Strong growth is expected to continue, driven by population growth, jobs growth and low interest rates.
Danny Richards Lead Economist of Global Data Analytics, also believes the overall 2020 outlook will be helped by commercial and industrial projects, driven by an improvement in consumer and investor confidence which will help offset the downturn in residential construction.
This is inline with the Property Council of Australia’s March 2020 survey with sentiment remaining positive and expectations for national forward work schedules and staffing levels remaining strong.
Glue Executive has seen continued growth in the office fitout space as our clients see an upturn in projects after the completion of the 2 elections, and as companies continue to link productivity and talent attraction to the quality of their offices / workspaces.
Summary:
The analysis reviewed can be best summed up by Richards who points out: “Australia’s construction industry will regain growth momentum from 2020”. This will be driven by infrastructure spending, a rebound in residential activity and continued strong performance in commercial and infrastructure. Our own pipeline of assignments picked up towards the end of 2019, with Q4 2019 being one of our strongest on recent records.
From our own perspective, we placed several people across all sectors, working with both mid-sized firms and larger multinationals. This included a residential builder, adding to their leadership team, a Senior Engineer to head up an interstate consulting engineers office, as well as our design team working closely with a tier one architectural practice adding key staff to their Metro team.
We also have a strong pipeline of assignments coming into Q1 in 2020. Our key goal remains to partner with organisations looking for talent to help take their organisation to the next level.
If you are looking to add to your team in Q1 in 2020, or would like to discuss the current market for talent in the above sectors, feel free to drop me a line on the below:
Matt Upton – matt@glueexecutive.com.au or 0418 748 315
Here is to a prosperous and positive 2020!
References:
- Master Builders Association: MBA – Media Release – Insights from the latest building and construction data – 16th January 2020
- Property Council of Australia- Media Release – Confidence is looking up for the NSW Property Industry – Thursday 16th of January 2020
- WT Partnership – Australian Construction Market Report – October 2019
- Report: Global Data Analytics – Construction in Australia – Key Trends and Opportunities by State and Territory to 2023.
About the Author:
Matt Upton is an award-winning Recruitment professional, who leads the Glue Executive Design and Construction team. He has recruited within the design and construction space for over 15 years and placed key people with clients both here in Australia as well as the Gulf Region, Europe and North America.