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The GFC's Impact on the Building and Fitout Industry
Understandably the Global Financial Crisis has been the major talking point regarding Australian business strategy and consumer confidence since the start of 2010. A ripple effect starting in other parts of the world finally graced our shores resulting in unpredictable interest rates, increasing unemployment figures and the majority of businesses having to tighten their belts.
Arguably, one of those hit hardest by this was the building industry. The common feedback provided by long serving individuals in the building industry was that the GFC had brought with it the worst business conditions in 30 years. Work was already won and due to begin or be completed so the noticed gradual drop off in work began around June of 2010. The HIA released figures on March 4th confirming what the majority of us already knew, that the biggest building slide since 1981 was upon us generating a 26.5% reduction in building approvals in January of 2010.
Long term project and work stability disappeared with most companies in the building sector only having work security for 2-3 months at best. Companies that were turning work down or rapidly expanding to cater for the required workload up until this point were now in a very different and rather nervous position. Where necessary, staff were regrettably retrenched, costs were cut and a once prosperous future was now looking rather bleak. As you can imagine now was not the time to invest money in an office move, a new fitout or construction of a new building.
Fitout projects changed to cater for the resulting diminished confidence in the market. Rather than moving, companies chose to stay still and do as little as possible to cater for their staff while keeping expenditure to an absolute minimum. Suddenly the replanning and restructure of furniture became common practice with a reduction in building works ensuring a cheaper project. The attitude of “How can we do as little as possible while maintaining operations?” was prominent.
Price competition dramatically increased to keep work coming in with many of the larger organisations running projects at a loss just to ensure workflow for the remaining staff. Even architects and architectural firms were chasing work which was the first time since many of them could remember. Those of you who did continue with your pre-planned office fitout and refurbishments through this time probably ended up with a great end product at a well reduced price.
Now as consumer confidence begins to rebuild and the financial year comes close to its end, those building and fitout companies who have managed to operate through the worst times in most of their business histories are seeing enquiry start to build. Historically, an increased workload generally follows the market downturn as budgets are re-allocated and projects that were placed on hold are finally resumed. Whilst this may not be immediate, it is a positive outlook after what has been for many, a rather difficult last twelve months.
Clockwork Projects proudly claims that operation continued through this time without any staff losses and looks forward to continued success well into the future. For any help regarding your up and coming design and build, fitout or refurbishment project contact Clockwork Projects for your free consultation.
