The building and construction industry is bracing for more turbulence as the Bureau of Meterology declared a La Niña alert.
The odds of there being a third sodden summer in a row have shortened, with a 70 per cent chance of another La Niña forming in the coming months.
Renewed cooling in the tropical Pacific Ocean and models indicating La Niña is likely during spring and early summer have prompted the BOM to raise the El Niño Southern Oscillation Index scale to “alert”, the last step before an official La Niña.
If the climate driver is declared, it would be the third consecutive La Niña summer, which is very rare, having only occurred twice since 1950, in 1973-76 and 1998-2001.

The climate driver is set to encourage rainfall in eastern Australia, priming the atmosphere for more flooding rains.  However, with the national water storage levels are currently sitting at 71.3 per cent, up 5 per cent on last year, a third wet year could signal disaster.

 

This new weather alert comes off the back of an already difficult situation for the construction industry, with price increases, supplier delays and labour shortage already causing pressure.
On the Sunshine Coast, the region has failed to live up to its name for nearly a year and that is contributing to lengthy delays.

Master Builders regional manager Nicola Scott said delays had ranged from a few months to a year.

“It hasn’t stopped … it has just been raining consistently since November,” Ms Scott said.

“The flow-on effect means people aren’t getting their homes in time.

“People aren’t moving out of their rental properties, and we’ve got a major rental shortage here.

“It’s just this constant unknown that I think everybody is facing at the moment, and it’s creating a lot of angst … a lot of pressure.”

The building and construction sector was deemed essential when the COVID-19 pandemic hit.

While those in the industry were relieved they could continue their work, it soon became clear the future would be paved with problems.

“Things started to really rear their ugly heads,” Ms Scott said.

“We could see there were major issues with materials, the HomeBuilder grant happening, demand outstripping supply, trade shortages.

“We’ve literally reached the point where we are just exhausted.”

Builder Dave Becker has been in the industry for more than 25 years, but he says he has never seen things this tough.

“Trade shortages, and then you’ve got the inclement weather that we’ve been smacked with,” he said.

“It is very difficult. It definitely takes a toll.

“The mental health within our industry is at a peak, I think … struggling, which is concerning.”

 

Costs up 10 per cent in a year

The most recent CoreLogic Cordell Construction Cost Index found national residential construction costs rose by 10 per cent over the 12 months to June 2022.

CoreLogic’s Tim Lawless said, over the past five years, costs had surged by a staggering 25 per cent.

“[This] has a knock-on effect to builders’ margins, budget blowouts for customers not on fixed-price contracts, and home owners waiting for their projects to finish or even start in many cases,” Mr Lawless said.

Ms Scott said it was important for builders to keep the “lines of communication” open with clients.

“If builders are seeing major increases in their contract price and it’s a fixed-price contract, the best thing they can do is sit down with their clients [and ask], ‘Can you meet us halfway?'” Ms Scott said.

“However, a lot of people aren’t in the financial position, so that means that our builders are wearing the cost, and it’s hurting.”

Ms Scott said customers also needed to be aware of the pressures and be realistic.

“Your builder is not telling you porkie pies. This is really happening,” she said.

Sources:

https://www.abc.net.au/news/2022-07-21/building-pressures-on-sunshine-coast-rain-price-hikes/101255112

https://www.abc.net.au/news/2022-08-16/la-nina-alert-declared-bureau-of-meteorology-weather/101337188