Sydney construction restrictions ease on Wednesday, but experts warn of ‘big lag times’ for $15 billion in developments

Sydney construction restrictions ease on Wednesday, but experts warn of ‘big lag times’ for $15 billion in developments
  • Greater Sydney construction sites will soon reopen at up to 50% capacity, but it could be weeks for hard-hit firms to feel the benefits.
  • “The ramp up period compared to the shutdown period is about two to three times [longer],” Urban Development Institute of Australia NSW CEO Steve Mann said.
  • It may take some time for south-west Sydney’s construction workforce to hit the state’s new vaccine requirements, he added.
  • Visit Business Insider Australia’s homepage for more stories.

As thousands of locked-down Sydney tradies prepare for their return to the worksite on Wednesday, a leading industry group says it may take weeks for some $15 billion in development to get back up to speed, pushing some hard-hit construction firms even further to the edge.

From Wednesday, unoccupied construction sites across Greater Sydney, the Blue Mountains, Wollongong and Shellharbour will open to workers at up to 50% of regular capacity.

Since the start of August, only a limited amount of “preparation work” has been permitted on Sydney worksites, with strict personnel caps in place.

Tradespeople from the eight local government areas (LGA) of Blacktown, Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield, Georges River, Liverpool and Parramatta will also be added to the list of authorised workers, meaning they will be permitted to leave those regions to work amid strict and ongoing COVID-19 lockdown measures.

Vaccination requirements will apply for workers hailing from those regions, which have been deemed COVID-19 transmission hotspots by the state government.

Those construction workers will only be permitted on-site if they have been fully vaccinated; if they received their first dose of the vaccine at least three weeks ago; or if they received their first jab within three weeks, but returned a negative COVID-19 test within 72 hours of returning to work.

“For the industry to remain viable, we need to restart those projects and get construction workers where they are most needed,” NSW Treasurer Dominic Perrottet said on Saturday.

“But we also need to minimise the risk of COVID-19 transmission to keep our communities safe, and these measures will help us achieve that balance.”

Reopening construction sites to workers from the locked-down LGAs is a “bold step” by the state government, said Steve Mann, CEO of the Urban Development Institute of Australia NSW (UDIA NSW).

“They realise the paramount importance of this sector to the economy,” Mann told Business Insider Australia on Monday.

“It’s a lifeline for the sites inside the LGAs, which at one point we estimated was about $15 billion of development. So overall, there is much greater occupancy for construction from Wednesday than there has been the last few weeks.”

Permitting locked-down tradies to pick up the tools set an “enduring” precedent which could carry on to future lockdowns, he added.

Yet even if workers are permitted to return to those idle construction projects, it may takes weeks before businesses make up for lost time.

“The ramp up period compared to the shutdown period is about two to three times,” Mann said.

“And that’s just all that coordination of resetting up your supply pipelines, making sure the right workers are coordinated at the right time.

“They’ve got to reset their scheduling again, because they would have been scheduling to try and not use people in the LGAs. Now they’ve got to reschedule the 50% workforces.

“[For] some that will make little difference, some it will make massive difference.

“If you’re dealing with a water connection, that can be weeks and weeks before that gets programmed in. So there’s big, big lag times in coordinating development.”

UDIA NSW has previously warned of businesses taking significant hits to their cash flow as project timelines spiral out, and Mann said those delays will also flow to the construction financing, insurance, and certification sectors.

The requirement for tradies in those locked-down LGAs may create another lag effect, Mann said.

Health Department data shows south-west Sydney, which harbours a disproportionately large portion of the city’s construction workforce, has some of the lowest vaccination rates of any metropolitan region nationwide.

“There’s a portion of the workforce that still have to really get going on vaccination before we’re gonna be operating even at the 50%, I think,” Mann said, while praising the state government’s pledge to vaccinate 8,000 workers at Sydney Olympic Park this coming Sunday.

“They want to see this as a vaccination push in our industry, and I think that’s very positive.”

UDIA NSW is also aware of “half a dozen” trials involving rapid antigen testing, which proponents hope will allow workers to return negative tests on-site.

Beyond those immediate measures to bring the city’s building sites up to speed, Mann called for the creation of a “stay open plan” to encourage continual investment in the sector.

With the Association of Professional Builders warning of looming business failures due to inflated overheads, increasingly expensive materials, and blown-out timelines, Mann said clearer government timelines could provide much-needed stability for the sector.

“We need that sort of pathway that won’t mean investment decisions just go with the lowest risk because there’s too much uncertainty.”