Building materials suppliers are spending less on building materials and more on labour, cutting their costs.
Photo: Supplied Building materials supplier Aac said it had cut labour costs by around 10 per cent since last year, and was now spending about $10 million more per year on labour costs than in the first half of 2017.
Advertisement The company said it was using a combination of technology and capital to cut costs and improve its performance.
“We are seeing a huge reduction in labour costs in our supply chain and we believe this is an area that will continue to improve,” Aac chief executive Richard Johnson said.
Mr Johnson said that while the company had reduced costs by about 10 per-cent since last August, it was still not spending more on wages and working conditions.
“It’s been a very challenging year, but we are finding the right balance between efficiency and cost,” he said.
“In the past, we would have had to spend more on our workforce to stay competitive, but this year we have managed to get back to a more competitive position.”
Construction company RSL’s wage cuts Aac, which supplies building materials to the construction industry, is also seeing a reduction in wages.
The company has slashed its workforce by more than 20 per cent, and has reduced its annual wage cost by $10.6 million.
However, it has still raised wages by up to $25,000 for construction workers and $30,000 to construction apprentices.
The firm said the reduction in workers would have cost it $70 million to $100 million in increased costs over the next five years, but it expected the wage cost savings would continue to be realised.
RSL said it would also cut the number of apprentices who were taking training courses at its site.
Construction apprentices with Aac’s RSL project.
Source: RSL RSL chief executive Nick Riddle said the company was also making savings by reducing the number it was investing in labour training courses and apprenticeships.
“The new apprenticeship models, which are coming into effect this year, are also going to help us in our drive to meet the new building codes,” Mr Riddle told the ABC.
“There is a significant cost to train and develop apprentices, and we are making sure we do that for free and we do it to the highest standards.”
I think the biggest impact is going to be in the new apprenticeships.
“If you were to compare the total costs of the building industry with AAC’s, we’re down to $50 million.””
Our costs have dropped from about $40 million to about $30 million,” Mr Johnson told the program.
“If you were to compare the total costs of the building industry with AAC’s, we’re down to $50 million.”