It’s the position that nobody in a commercial construction company in Melbourne or anywhere in Australia or abroad wanted to be in. In fact, how could one even brace for such a crisis? It’s fair to say that the COVID-19 pandemic derailed lives and livelihoods to boot, and industry is still recovering.

The material supply crisis is all too real as we find new and inventive ways to keep operations going. But, sadly, many commercial builders in Melbourne and throughout Australia have gone under due to the enormity of the situation.

It’s a warzone

With the pandemic and the state of the market contributing to the enormous price increases for timber and steel, Russia’s war in Ukraine is now pushing costs higher by almost 50%.

Timber has doubled, as has steel and concrete by 20% to 40% as well. Where is the relief? Adding to this is Australia’s own natural disaster problems up north.

Quoted in The Financial Review, Hutchinson Builders chief executive, Greg Quinn, says: “In my opinion, a section of the construction industry in some parts of the country, like south-east Queensland, is in quite a mess, and some businesses are unlikely to survive the dilemma currently confronting the industry”.

A recent MAZ Group blog looked at the demise of a power player like Probuild, which went into voluntary liquidation. It begs the question: if a major commercial construction company is struggling, what hope is there for small-to-medium construction and independent builders?

Minimising risk for commercial construction

The Future Australian Infrastructure Rating (FAIR) initiative could be the lifeline commercial builders in Melbourne are craving. With greater collaboration and coordination between industry stakeholders and delivery agencies to minimise risk and disruption to a struggling industry, leadership from the Federal Government is crucial in efficiently and immediately rolling this out.

No easy fix

The current crisis is hitting builders using fixed-price contracts the hardest. Due to not having the ability to pass on cost increases on timber and steel in the six to 12 months it takes to finish a project – they crumble, and clients suffer.

Paul Bidwell, Master Builders Queensland deputy chief executive, states: “The only certainty is the prices keep on going up. We don’t see it ending. There is no sign of that… people tried to lock in prices and they just kept on going”.

Doom and gloom? Yes and no. We’re at the mercy of the world market and pandemic fallout, but time heals all situations.

Fortunately for MAZ Group, it’s business as “usual”, with the team busy delivering multiple projects across the construction precinct, in particular around the Melbourne Airport precinct and various cladding replacement projects for Cladding Safety Victoria.

To discuss your upcoming project or learn more about MAZ Group, leading commercial builders in Melbourne, get in touch with us today.