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HIA says housing in destructive decline with half million jobs at risk

The Australian Forest Products Association has doubled down on its call for an urgent housing stimulus package with the latest Housing Industry Association forecasting, released today, showing a devastating decline in new housing construction. Source: Timberbiz

The forecasting indicates new home building will fall by almost 50%, putting half a million jobs at risk over the next year.

“In 2018/19 the industry engaged over 1 million people to commence building almost 200,000 new homes. Next year we expect to start just 112,000 new homes leaving up to 500,000 jobs at risk,” HIA’s Managing Director Graham Wolfe said.

“The shock to the economy from the halting of overseas migration, the absence of student arrivals and uncertainty over the domestic economy will see the market at a lower point in December 2020, than it was during the 1990’s recession. It will then continue to decline though 2021, even with the return of overseas students and migration,” he said.

“This shock will reverberate through the residential building industry, up and down the supply chain. Employment in the sector is not expected to recover within the next two years.”

The HIA’s dire new forecasts back up Australia’s timber processing industry’s early forecasts of a major drop in associated timber demand, with some regionally based mills already reducing production and cutting staff.

“The housing construction sector is the engine room for growth and jobs in Australia’s economy, with more than one million Australians working across multiple industries, and the timber processing sector is the ‘canary in the coal mine’ signalling early changes in demand,” AFPA CEO Ross Hampton said.

“Australia’s timber industries supply most of the renewable timber products for new houses built in Australia and a substantial portion of multi-unit and commercial construction, and we are deeply concerned that all the signs show this is facing a drop in demand, off a big cliff.”

Mr Hampton said timber processing companies were already feeling the impact of the slowdown in construction, as were companies right along the supply chain.

“We estimate sawn timber demand will drop by at least 50% over the next six months and these dire forecasts are being backed up again by HIA’s latest figures,” he said.

“This is why AFPA, and a range of other industry bodies, are asking the Government to announce an urgent and comprehensive stimulus package for new homes and upgrades and renovations,” Mr Hampton said.

Mr Wolfe said that the nature of this shock required significant and ongoing support from policymakers in Australia and amongst our trading partners.

“The risk that insufficient support will produce a decade of deflation, depression and