New economic modelling released yesterday shows up to 43, 000 new homes will not be built in the next 12 months as a result of COVID-19.
The Master Builders Australia (MBA) modelling reveals the devastating impact the lockdown of the economy is having on the building industry, the economy and the community.
In light of the economic impact being wrought by COVID-19 the MBA revised its previous industry forecast which was released in February this year.
MBA CEO, Denita Wawn, said the scope and depth of the potential damage to the industry and the economy is devastating.
“We previously forecast that there would be around 159,000 new housing commencements in 2020/21. We now expect there to be only around 116,000, a drop of 27 per cent,” she said.
“The housing industry is vital to the economy and jobs. There are nearly 400,000 building and construction firms in Australia and more than 90 per cent do work in the residential building sector. Around 388,000 of these are SMEs.
“There is already a current shortfall in achieving the required target of 200,000 homes a year which means that the impact on the housing needs of our community will be severe.”
Wawn applauded the Federal Government and State and Territory Governments for the stimulus measures they have already announced but called for more immediate action.
“We have proposed a range of stimulus measures to the Federal Government and are working with them in an effort to advance them,” she said.
“But what this forecast shows is that stimulus measures cannot wait. Our industry, the economy and the community cannot afford to wait months,” she said.
“We want to protect the viability of hundreds of thousands of small businesses and the jobs of a million Australians. For that we need governments to act now.”
The Federal Government is planning a statement later this month to outline the impact of the coronavirus on the economy and the government’s actions to date.
This will be reinforced by an update on the economic and fiscal outlook in June, following the release of the March quarter national accounts.
Those March quarter figures on economic growth could identify the start of a decline which could lead to a recession.