Business Sentiment – NSW Budget good – but it’s time to focus on the development pipeline

The NSW Budget is a clear response to the property construction and development sector’s greatest concern – the pipeline of work according to Tom Forrest, CEO of the Urban Taskforce.

“The property construction and development sector’s views on the prospects for recovery were captured by leading Australian consulting engineer company – Northrop’s “Q1 FY20-21 COVID-19 Business Confidence Survey”. The survey of Northrop’s clients found while there is movement in the government sector pipelines, there’s still uncertainty around the overall development pipeline”, Mr Forrest said.

“Reforms on Stamp Duty are great news. The NSW Government is right to focus on the delivery of infrastructure; reduction in taxes, fees and charges; and speeding up the planning approval process. But the pipeline of approved works needs to extend beyond the funding and approval of Government projects and deliver the new rezonings and development approvals for private sector investment into new housing and jobs for a pipeline of development to be delivered by the private sector.

“The risk is that unless a pipeline of work is created, the worst is yet to come.

“The Department of Planning, Infrastructure and Environment is moving in the right direction with their efforts to stimulate Councils to fast track approvals and their own Planning Delivery Unit and Priority Assessment Program. The budget funding these initiatives is a significant step in the right direction, but a pipeline of work will be dependent on the success of the Government’s broader reform agenda.

“Critical to a longer term development pipeline will be the Department’s work on optimising industrial land use and employment land zoning reform to create greater flexibility and secure greater economic value and employment.

“Despite “alarm” bells sounded by organisations with a vested interest in maintaining a complex and restrictive planning framework, the Government needs to be bold and ambitious in undertaking this work”, Mr Forrest.

Northrop surveyed fifty of their clients between July and October 2020 asking about COVID 19 working arrangements and business confidence and issues into the future. Key findings on the challenges to business for the next six months included:

  • Uncertainty around the overall development pipeline – with winning new work and having staff fully occupied over the next 6 months and potentially beyond worrying the sector
  • An anticipated decrease to the pipeline of work, particularly for those working on new residential and commercial developments being of great concern

“Northrop’s survey found many of our clients are very concerned that as the pipeline of future projects diminishes, many businesses will have to make decisions around redundancies or reduced hours/pay which can lead to losing good people” said Northrop Sydney Regional Manager, Todd Halliday.

“These have been challenging times but in amongst the challenges there are always opportunities. The opportunity is there for Government to fully realise planning reform initiatives that deliver an ongoing development pipeline.”

Northrop’s “Q1 FY20-21 COVID-19 Business Confidence Survey” can be accessed by clicking here.

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