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Calamitous decline in housing coming says AFPA

The Australian Forest Products Association (AFPA) is forecasting a “calamitous decline” in housing construction and says an urgent recovery package is needed. The AFPA is calling on Australia’s leaders to urgently put in place a stimulus recovery package for the sector to counter the massive reduction in new house starts and therefore the timber products used in their construction. Source: Timberbiz

“Australia’s softwood timber processing industry supplies most of the renewable timber products for new houses built in Australia and a substantial portion of multi-unit and commercial construction,” AFPA CEO Ross Hampton said.

“A survey of our members has laid bare the massive impact CoVid-19 is about to wreak. New house starts are plummeting and forward orders are drying up. AFPA is estimating that the decline in sawn timber demand for Australia’s sawmills will be more than 50% over the next six months,” he said.

“This is unbelievably bad news for regional Australia where the sawmills are located. There are more than 45,000 Australians employed in the sector and in many cases this job is the primary bread winner of the family.”

Mr Hampton said that if sawmills begin to reduce production in response to plummeting demand, it will mean fewer shifts, regional job losses and a flow on downturn in spending on services in vital regional towns and States such Mt Gambier SA, Bell Bay TAS, Bunbury WA, Colac VIC, Maryborough QLD, Tumut, Tumbarumba, Oberon and Bombala NSW, where forest industries underpin the economy.

“The housing construction sector is the engine room for growth and jobs in Australia’s economy, so a large recovery stimulus package focused on increasing new housing demand immediately will positively impact jobs, businesses and communities right across the nation and support broad supply chains,” he said.

“Potential measures should include increasing new homeowners’ grants and other stimulus (for any new home built); bringing forward government-funded construction projects such as affordable housing commencements; and tax and land price support. The package should also include streamlining regulation to make the new house construction process simpler and reduce the time between approvals and construction to optimise the new house construction project pipeline.

“If local jobs are to be saved it will be important that policy makers grapple with the task of attempting to ensure that any stimulus delivered into this area flows to all those Australian businesses which are involved in all aspects of producing materials for local construction and that imports supporting overseas recoveries, do not undermine the policy intent,” Mr Hampton said.