Brighter skies ahead
While the devastating Queensland floods caused pain and anguish for many, a new business report reveals things are looking up
Earlier this year, people around the country and even those further afield watched helplessly as flood waters swept through Queensland and northern New South Wales causing loss of lives and billions of dollars in lost property and livelihoods. With an affected area equivalent to the size of France and Germany combined, and spanning 86 cities and towns, it’s no surprise that Prime Minister Julia Gillard and Queensland Premier Anna Bligh described the floods as “the worst natural disaster in our history”. According to an article on Businessday.com.au, economists have broadly estimated that the flood bill will total more than $10 billion dollars, an amount that will be shared by the federal and state governments, insurance companies and businesses.
Commenting on the repair bill specifically in the housing sector, Warwick Temby, Executive Director, HIA Queensland said: “With the damage so widespread it is still difficult to put a close estimate on the cost of repairing homes damaged by the floods and cyclone. However, based on experience with the Mackay floods and cyclone Larry, repairing the 6,000 or so damaged homes could cost about $250-300m. While this is a significant amount it represents about 2% of the annual spend on new homes and renovations in Queensland.”
Several industries have been hit hard by the floods, including the transport and logistics, tourism and agricultural sectors. However, business information analysts IBISWorld have found that there are a number of industries that will experience growth during this time due to their important role in the massive cleanup effort. According to IBISWorld’s research, the building industry is just one of the sectors that will be in high demand as people and companies start to rebuild their homes and businesses. “Hopefully this growth will, in some way, help balance out the losses faced by other sectors and lead the road to recovery for our devastated eastern states,” IBISWorld General Manager (Australia) Robert Bryant said.
While IBISWorld anticipates that the rebuilding of roads, train lines, bridges, community facilities and commercial premises will result in increased revenue for the construction industry, the housing sector— including the kitchen and bathroom industry — in particular will experience a significant boost with an estimated 28,000 new homes to be rebuilt and many more repaired due to damage caused by the floods. Retail outlets selling household goods will also enjoy growth during this time.
“IBISWorld forecasts that over the next two years rebuilding will create $10 billion in added revenue for the construction industry — with analysts revising the industry’s forecast for this financial year upwards by $1.2 billion to $295 billion,” the report said. “Looking ahead, IBISWorld has added $4.8 billion to its forecast industry spend for 2011-12 to a total of $311 billion, with an additional $4 billion flowing into 2012-13 to reach $319 billion.”
According to IBISWorld, the construction industry will experience an increased level of repair and rebuilding work from the second quarter of 2011.
For more information visit www.ibisworld.com.au
Top: Photo by Jim McKee (www.flickr.com/photos/jimmckee/5348210714/in/set-72157625678927513)
Bottom: Photo by Robert Hoge (http://flic.kr/p/99Evj7)
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