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Construction’s next supply chain risk is labour

by usiscc
March 11, 2020
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Concerns about movement are increasing. Victoria on Wednesday declared a heightened tier-2 state of emergency and the state’s chief medical officer warned that a higher level response, forcing the closure of schools, universities, workplaces and major events, could be reached within the next four weeks.

This posed a real threat to the property industry, Mr Morrison said.

Adequate supplies, no need to stockpile: Industry Minister Karen Andrews. AAP

“In the next phase, if the government says to businesses ‘keep your people at home’ and doesn’t allow them to congregate in large groups and restricts travel, that changes the equation for many types of functions like construction, and it will have much broader base impact,” he said.

Smaller, under-capitalised businesses would be the most vulnerable, he said.

“The economic consequences will be very significant. It will be a completely different experience compared with the last two months, which has been about our exposure to China, access to materials and tourism.”

Other supply chains – particularly the replenishment of empty supermarket shelves – remain a problem because of strict curfews put in place by local authorities that limit the ability of supermarkets to make deliveries to stores, Australian Retailers Association executive director Russell Zimmerman said on Wednesday after the meeting.

“There are curfews when deliveries are made to stores,” Mr Zimmerman.

“It may cut off at 10pm and you can’t deliver before 7 o’clock in the morning. If we could get those trucks into those retail stores at other times beyond the curfew times, there is a huge opportunity to get the stocks onto the shelves and people would realise the stock is there.”

The proliferation of mixed-use developments in the most recent residential development boom, which put apartments on top of retail facilities such as supermarkets, and setting the scene for opposing interests, has likely increased the potential for clashes between domestic and logistics demands.

But the restrictions predated mixed-use developments, Mr Zimmerman said.

“It doesn’t matter whether it’s a new development or an existing development or whatever,” he said. “They’re across the board everywhere. There are restrictions on those delivery times.”

Planning consultant Terry Rawnsley said apartment buyers in mixed-use developments should expect night-time deliveries.

“It’s around finding that balance – you’ve bought an apartment on top of a supermarket; you should expect certain things to be happening,” he said.

Speaking after the two-hour round table, which brought together industry associations from a range of sectors, Ms Andrews said the country had adequate supplies of food and medicines and that the problem was restocking shelves fast enough.

“There are sufficient supplies in Australia at this point in time and there is no need for panic buying,” she said.

Medicines Australia chief executive Elizabeth de Somer said medicine manufacturers generally had three to six months’ worth of stock on hand and that community service obligations required suppliers to restock medications on the federally funded pharmaceutical benefits scheme within 24 hours.

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