MBV continues to be vocal on critical supply shortages with news that Australia is facing its worst materials shortage in more than 40 years.
While delays in sourcing materials, especially from international suppliers, is not a new issue, industry experts say it’s been exacerbated by the COVID-19 pandemic.
The Warrnambool Standard reported today that a shortage of building supplies had left one local business with no choice but to limit some items.
Pontings Mitre 10 Warrnambool director John Ponting said a 28 per cent rise for steel was predicted in January.
If the increase goes through, Mr Ponting said the year-on-year steel price will be 50 per cent higher while the price of certain timber lines has also doubled in the past 12 months.
Also impacting the shortage is the unprecedented demand for work spawned by a combination of record-low interest rates and the federal government’s successful HomeBuilder stimulus.
As a result of the materials shortage, valued MBV member Bowens has issued an open letter addressing the demand for materials generated from the increase in residential building activity, unexpectedly caused by the COVID-19 pandemic. This unprecedented demand for materials together with COVID-19 related supply challenges is creating limited availability of key resources and resulting in longer lead times in many sectors, including the timber framing industry.
To view Bowen's letter, click here.
MBV CEO Rebecca Casson said one of the biggest challenges still facing Victorian building and construction companies was escalating building product prices and supply shortages.
With building contract prices locked in, the large and unanticipated surge in the prices of many building items such as timber and steel-based products meant that some builders were finding the cost of completing works was more costly than expected.
In many cases, this can make projects loss-making.
Ms Casson warned that COVID-19 lockdowns in 2021 and labour shortages were likely to further influence building and construction insolvencies in Victoria over the coming months.
In September, 83 building and construction companies across Australia – including 19 in Victoria - entered external administration, up 31 per cent at the same time last year.
Ms Casson said MBV was actively involved in finding supply shortage solutions to ensure sustained growth for the building and construction industry.
At the request of MBV, the Victorian Government has asked Commissioner for Better Regulation and Red Tape Commissioner, Anna Cronin, to investigate the issue of building and construction material shortages.
At the start of November, the Commissioner delivered her report to the Government on the state of supply shortages in Victoria.
However, the Victorian Government has yet to make the report public.
“This issue is now urgent, and we look forward to hearing the Commissioner’s recommendations as soon as possible,” Ms Casson said.
“We need solutions before any more Victorian building, and construction companies hit the wall.”
Ms Casson also appeared on Prime 7 Local News in Albury to discuss a critical shortage of construction workers in the Upper Murray region.
Read more here.