8 minute read
Rise and fall
There is a lot of doom around the economic impacts of COVID-19. The facts show there will be a small decline in revenue in the plumbing industry to 2025 and there will be growth. Kathryn Kernohan investigates.
The COVID-19 pandemic and deteriorating demand for household maintenance and repair will see a 4 per cent decline in revenue for the plumbing industry Australia-wide, according to IBISWorld’s latest report. IBISWorld constantly monitor the industry impacts of current events in real-time and have released the Plumbing Services in Australia report. The report said the decline is also due to the downward trend in non-building infrastructure projects. Together, these factors mean that overall industry revenue is forecast to decline slightly, at an annualised 0.2% to $17.3 billion, over the five years to 2025. These predictions are aligned with a mid-year snapshot published by the Australian Bureau of Statistics, which found that 81,700 jobs in the construction sector had been lost between March and July. More than 50,000 of these were in Victoria and New South Wales.
“The plumbing services industry plays a crucial role in the Australian economy, and employs more than 65,000 people,” says Master Plumbers CEO Peter Daly. “Like all industries, we have been impacted by COVID-19 and this report outlines a range of additional factors that have led to subdued revenue growth over the past five years. “However, the plumbing services industry is essential and resilient, and we know that we will bounce back strongly with an expected improvement in household disposable income over the next five years and continued growth in the building construction market.” The report outlines key external drivers that have contributed to recent downward trends, including significant competition for contracts in the single-unit housing construction market. Additionally, a decline in non-essential household spending has weakened demand for maintenance and repair services as well as the purchase of fixtures and appliances such as ovens, gas central heating systems, hot water systems and bathroom fittings. It also explores the current and expected impact of COVID-19 on the industry, including a projected slump of investment in housing and non-residential building construction, which is forecast to reduce demand for plumbing installation work during 2020-21. Approximately half of the industry’s revenue is derived from installing plumbing fixtures and fittings in new housing and non-residential buildings and as the report outlines, the pandemic is expected to discourage foreign investment in new projects and may diminish the capacity of local investors. New residential building activity such as the installation of plumbing fixtures (bathtubs, showers and toilets) and drainage and the installation of appliances (hot water systems, dishwashers, gas heaters and ovens) has always been the primary source of demand for plumbing services. The report warns that this reduced demand could lead to job losses and the closure of some firms.
In more positive news, there is a projected increased demand in the non-residential building construction sector, in line with records levels of industry activity over recent years.
$17.5bn
revenue generated by the plumbing services industry
$1.7bn
profit generated by the industry in the current year
27,300
number of plumbing businesses in Australia
65,300
opportunities for licensed difficult trading conditions for most
October to December quarter, number of people employed by the plumbing services
IBISWorld identifies five key factors for success in the plumbing services industry:
1
2
3 Ability to quickly adopt new technology Having a good reputation Ability to compete on tender 4
5 Ability to change what market the firm operates in Ability to expand and curtail operations rapidly in line with market demands
Investment into new commercial and institutional buildings – like offices, retail stores, schools and hospitals – present continued plumbers to provide plumbing installation work.
With major casino, hotel and office construction projects nearing completion across the country, the report finds this will generate opportunities for some of the larger plumbing contractors. The BCI Forecaster, a monthly indicator of construction contract values soon to hit the market, also paints a picture of cautious optimism. The snapshot finds a 26% increase in the value of projects in the in comparison to the previous July to September quarter. This increase is attributed to the number of shovel-ready projects across the country, announced during the pandemic. IBISWorld’s report also highlights that many smaller plumbing firms have diversified their service offerings over recent years due to subdued demand in the residential construction, renovation and repair markets.
This means some plumbers now offer specialised services like the installation of environmentally friendly solar hot water systems.
“The plumbing services industry faces some challenges over the coming years as we grapple with the impact of COVID-19 and the subsequent decline in new residential building projects and expected tightening of profit margins across the board. IBISWorld points to industry in Australia
plumbing contractors in the short and medium-term” says Mr Daly.
“But there is reason for optimism. A projected increase in discretionary household spending over the next few years which may stimulate demand for plumbing renovation, maintenance and repair services on existing dwellings as well as Government investments into non-building infrastructure projects.”
Breaking down $17.5bn revenue:
29.8% water plumbing
23.1% sanitary plumbing
22.8% gas fitting
14.0% mechanical plumbing
10.3% drainage and roofing plumbing
Plumbing preparedness
Kate Jones meets Brian and Sarah Curran, Australia’s most remote plumbers, and finds out the challenges and rewards of their unique working environment.
Brian Curran is possibly Australia’s most remote plumber. He covers jobs across more than one million square kilometres. Living in Tennant Creek in the Northern Territory with wife Sarah and their three young children, Curran works on far-flung cattle stations and for outback indigenous communities. Sometimes, he travels for two days just to get to a job. Once there, Brian or his employees can spend up to a month doing everything from ordinary plumbing work to odd jobs. “Because of the distance and the logistics of getting to some of the cattle stations, we’ve been asked if we know anyone to do this or that, and we just jump on and do it, and it could be building sheds or concreting,” he said Brian, who runs Barkly Plumbing Services with Sarah, is now urgently looking for three more plumbers to come on board and join his team of 10.
Having won some major contracts recently, their workload is increasing and the couple need more hands on deck.
“With the contracts we’ve been winning lately, we need more people to do a really broad scope of work; town work and remote work,” Sarah said.
“Sometimes our fellas are out for three to four weeks at a time and we cover Katherine to Alice Springs and WA to Queensland.”
The work would not only suit anyone looking for a tree-change, but also those who are selfsufficient, relish a challenge and have a spirit of adventure. For example, most customers needing overnight jobs offer meals and accommodation, but there are times when a spare bed just isn’t available. “If you’re on a cattle station the accommodation and meals are usually supplied, but sometimes we do have to swag it, so it does get a little rough and you might just have to sleep on the back of the truck,” Brian explained. Above all, applicants also need to be three or four steps ahead of the game in terms of preparedness. “The big thing here is you have to make lists so that you bring more stuff because you’re better off having more than having to come back for things,” he said.
Having won some major contracts recently, Brian and Sarah’s workload at Barkly Plumbing Services is increasing and the couple need more hands on deck. They are now urgently looking for three more plumbers to come on board.
“You could be 600kms away and there’s no point in ringing the office because I can’t help you when you’re out there.” The employees who work with the Currans are accustomed to the wide variety of jobs and some specialise in the long stints of work on outback cattle stations or remote communities. Sarah said new staff would be best to take on the diversity of work. “We’ve got longstanding staff and some of them have been through their apprenticeships and have stayed on with us,” she said. “The qualities of our staff are: they love the bush work they do, they just get in and get it done, and there’s not a lot of whinging, unless there’s no beer!
“So we’re looking for someone who is keen to get in and do everything.” Solar technology installation is an increasingly busy work front for the Currans and their team. With drought impacting many Northern Territory farmers, most are looking for ways to improve their solar pumping and sewerage systems. “We do a lot of solar boards, especially in the last year when we didn’t have any rain and there was a million head of cattle shipped out of the Barkly region,” Sarah said. “There were a lot of cattle properties who couldn’t actually water and feed their cattle. So this year they’re preparing themselves in case that happens again.” Cameron Horsey, plumbing trainer at Master Plumbers, met Brian at a medical gas course three years ago. Horsey has been so intrigued by the nature of Brian’s remote work, he hopes to one day visit Tennant Creek to work with the Currans. “Plumbers need to think well ahead of what the job is and make sure they’ve got everything they need available because they can’t just go down the street for supplies. To be so organised in such a remote setting would be pretty challenging on a daily basis, let alone over a month.
“That’s why I want to see how he does it because it would be incredible as a business to see how it operates.”
For more information about employment opportunities, please contact Barkly Plumbing Services at bcurran@barklyplumbing.com.au or call (08) 8962 2502.
