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Housing : June 2009
Industry Outlook ‘Housing activity is nearly 30 per cent below underlying levels of demand.We are running our brick plants at around 70 per cent of capacity, and roof tile plants at 50 per cent of capacity.We have suspended production at two timber mills and temporarily turned off production in some other areas of the business. The Stimulus Plan: Benefits for our industry • $6 billion will be provided over three-and-a-half years for the construction of 20,000 new social housing dwellings nationally, and a further $400 million over two years for repairs and maintenance to existing public housing dwellings. • $14.7 billion over three years for the Building the Education Revolution program, for new schools, as well as repairs and maintenance to existing school infrastructure. • The government has also brought forward $110 million of funding for the Trade Training Centres in Schools Program, from 2010–11 to 2009–10. This fast-tracks measures to improve the skills base of the workforce. Right: CEMEX Australia’s Bruce Thompson, general manager of sales and marketing – concrete. ‘We are doing this by using a lot less contractor labour and by asking employees to use their annual leave and long service leave during temporary plant closures, and of course overtime has significantly reduced. ‘While Boral’s full-time employees are down by around 5 per cent compared to December 2007, by and large in Australia we have been hanging on to our people. There is obviously a point, however, where employment levels are not sustainable if conditions do not improve or if they worsen.’ CEMEX Australia’s Bruce Thompson, general manager of sales and marketing – concrete, welcomes the package and believes that government intervention is critical to restore some confidence to the industry and for employment prospects. ‘There is still a lack of confidence resulting from the global financial crisis and anything government can do to allay that fear is most welcome,’ he says. Austral Bricks’NSWState Sales and Marketing Manager Avery Spackman says the schools package won’t really start generating activity for Australian manufacturers until the middle of the year.When it does, much of the manufacturing industry could be taken by surprise. ‘Austral Bricks will be ready and we will have the capacity,’Avery says. ‘But there are a whole host of other businesses that will have difficulties because of the shortages of trades and because some smaller players just won’t have the capacity to deliver what’s needed.’ ‘There is still a lack of confidence resulting from the global financial crisis and anything government can do to allay that fear is most welcome’ Avery says in NSWalone, there are 900 schools being upgraded and 9000 new public housing dwellings being built. He says there’s also pent-up demand in the market, with NSWonly expected to have 34,000 housing starts next year, well below demand. Rod Pearse says industry is well positioned to supply much higher levels of demand. ‘We have solid inventory levels and production is ready to be ramped up as demand lifts,’ he says. ‘The industry more broadly is HOUSING JUNE 2009 27