Page 21 - Climate Control News Magazine March 2021

Commercial Air Conditioning
Office occupancy levels in Sydney and Melbourne are at all time lows.
EXPANSION OF TRAINEE SUPPORT
The government has extended and expanded the Supporting Apprentices and Trainees wage subsidy to include medium- sized businesses.
The Supporting Apprentices and Trainees wage subsidy was introduced by the Australian Government in August as part of their economic response to COVID-19. Previously, only small businesses were eligible to claim the wage subsidy.
The government is now extending and expanding the Supporting Apprentices and Trainees wage subsidy to include medium- sized businesses who had an apprentice in place on July 1, 2020.
Eligible small and medium business employers can apply for a wage subsidy of 50 per cent of an eligible apprentice or trainee’s wages, paid from July 1, 2020 to March 31, 2021.
Subsidies will also be available to any employer who re-engages an eligible apprentice that was displaced by an eligible small or medium business.
Employers should note that final claims for payment must be lodged by June 30, 2021.
Limited activity for HVAC contractors in 2021
FEDERAL GOVERNMENT SUPPORT has helped HVAC contractors survive the global pan- demic but what happens when the JobKeeper pro- gram ends later this month on March 28, 2021?
The JobKeeper wage subsidy ends at a time when the banks are withdrawing mortgage sup- port to customers.
At the same time the Housing Industry Asso- ciation (HIA) has warned construction opportu- nities will be severely limited in 2021.
“THERE WILL BE LIMITED OPPORTUNITY THIS YEAR FOR RESIDENTIAL CONSTRUCTION, ESPECIALLY APARTMENTS.”
Until now the construction market has re- mained surprisingly strong which is good news for the commercial air conditioning market.
According to the Australian Industry Group/HIA Construction Index activity improved by a further 2.3 points to 57.6 in December 2020 and January 2021, indicating four consecutive months of positive conditions and the strongest result since July 2017.
Ai Group head of policy, Peter Burn, said house building remained strong and the pace of improve- ment accelerated among commercial builders.
He said engineering construction maintained a gentler expansion and apartment building, which has lagged for some time, continued to do so although the pace of decline was arrested.
“Across the construction sector, activity, em- ployment and new orders all lifted on November levels,” Burn said.
“The strong rise in new orders is particularly encouraging and points to the likelihood that coming months will see the recovery continue.
“Notwithstanding the good news on recent ac- tivity and with interest rates set to remain low for several years, immigration is on hold there will be limited opportunity for residential con- struction, particularly the apartment sector over the course of 2021.”
HIA economist, Angela Lillicrap said there is a divergence between the conditions facing de- tached house builders and the conditions facing apartment builders.
She said the index tracking apartment con- struction continues to indicate the market is contracting, albeit at a slower pace.
“The apartment market is likely to be con- strained going into 2021 due to slower popula-
tion growth and a stronger preference for de- tached houses,” Lillicrap said.
HVAC contractors have also been impacted by the changing urban landscape in capital cities with office occupancy at record lows.
Office occupancy levels in the Melbourne and Sydney CBDs were at 7 per cent and 40 per cent of pre-Covid levels respectively in October 2020, according to data from the Property Council of Australia.
Assuming less future demand for commercial property and retail property in city centres, va- cancy rates could likely rise further for these spaces, despite some business’ efforts to bring workers back to the office in some capacity.
RBA: Recovery is well underway
THE RESERVE BANK of Australia said Austral- ia’s recovery is well underway.
Employment has recovered faster than previ- ously expected and has supported growth in household spending. In a statement released last month the RBA said the Australian economy re- bounded by three per cent in the September quarter, following a seven per cent contraction in the June quarter.
The main contributor to growth in the Sep- tember quarter was household consumption,
which increased by eight per cent, supported by growth in household income, the lifting of re- strictions and a reduction in precautionary be- haviour.
Employment increased by 280,000 people in the December quarter to be a little below its Feb- ruary 2020 level. Much of the increase in recent months has been in Victoria, where employment rebounded as restrictions in that state eased, while employment in other states has continued to recover at a more moderate pace.
Nationally, total hours worked remain a little below their pre-pandemic level, both because the number of people in employment is yet to fully recover and some workers are yet to see their weekly hours return to previous levels. The large increase in the number of employed people work- ing zero hours for economic reasons in the initial phase of the pandemic has mostly unwound as activity has picked up. Improved economic con- ditions have also supported a recovery in average hours worked, to be near pre-pandemic levels.
CLIMATE CONTROL NEWS MARCH 2021
21