FTMA Australia recognises that if we are learning anything as an industry it is that we are not just individual businesses operating as silos, but we are connected in our goals, projects, assets, and our difficulties. The purpose of researching and collecting data can bring us many insights into what we are all facing, as well as help us plan strategically, as individuals and as a collaborative, for the future.
FTMA have funded this research to directly benefit our members, and it is important to recognise that the FATSO report is a commercial product of FTMA Australia and our research partner, IndustryEdge.
We have decided to share the Executive Summary for the first edition of the Frame & Truss Sector Overview and Outlook produced by the Frame and Truss Manufacturers Association of Australia. The full report is only available to FTMA Members as this project is costing the Association considerable funds.
Quarterly editions of the FATSO will produced for members. Each edition involves a reasonably large number of interviews conducted over a short period of time. The interviews are confidential, only the interviewer from IndustryEdge and the person being interviewed know what was discussed.
In fact, the only other person who knows who is being interviewed each edition is me.
Once interviews are conducted, the industry ‘pulse’ is linked up and analysed with the data that is available to understand what is happening in the supply chain, for fabricators, their customers and suppliers, and to consider what might happen next.
Overall, the objective is to provide the sector and its entire supply chain with the best information about what is most likely to happen next.
A message from FTMA Chair, Aaron Hillman
For too long our industry has operated in a disjointed and fractured manner. The last few years have shown us that the real threats to our business lie outside that of healthy competition.
As a sector made up of approximately 280 plants, we are a metaphorical school of fish. All primarily focused on our own survival but unconsciously reliant on being part of something much larger. We respond to each other’s reactions to market conditions and fight to get to the front of a collective group that is ultimately navigating blindly.
The FATSO reports look to give fabricators a source of information and opinion unavailable anywhere else. Collectively we can strengthen our industry, build for the future, and re-establish what our sector is valued for, “A bespoke, designed, engineered, manufactured product that is both sustainable and critical for the country’s economy and social obligations “.
FTMA is appreciative of our fabricator and supplier members who have participated in these interviews, providing their insights into our sector, which makes this report unique.
We also thank our members for respecting that this is a commercial product of FTMA Australia and our research partner, IndustryEdge, and thank them for not sharing outside of our membership.
Finally, without the support of our valued partners, we would not be in a position to produce this research, and we thank our partners, who are listed at the back of the document, for their outstanding support.
We hope you enjoy the executive summary below and just a word, the full report is worth every cent of your membership, as this is data, that has never been available to our industry before, and will definitely help members plan for the future.
Kersten Gentle
FATSO Edition One – Executive Summary
Second half of 2023 could be toughest ever as slowdowns, high input prices and cancellations take their toll.
As this first edition of FTMA’s Frame and Truss Sector Overview and Outlook (FATSO for short) comes out, there is deepening industry concern about cancellation of projects in the pipeline of housing work.
Industry feedback does not quite include a consensus, but there is a strong view that the second half of 2023 will become increasingly tough.
For builders, fixed price contracts see them trying to exit unprofitable work, but for fabricators and others who have made commitments based on preorders, these are worrying times.
There has long been concern about the ‘profitless boom’ and now it seems, we’re seeing the results of a lengthy period when there was plenty of work, but much of it was unprofitable, due to higher input prices. Little wonder there are quite a few builders struggling to make it through the current situation.
Inventories throughout the supply chain are higher than desired. There may not currently be an industry measure of inventory, but there are plenty of stories and no one interviewed for this first FATSO is having any trouble getting materials at the moment. Labour is another matter.
The market situation compounds the concerns of fabricators and the timber supply chain that the next few months and the early part of 2024 could be more than a little difficult.
As with most of these events and issues, the devil may be in the detail and that includes timing. Anyone who can pick the bottom and top of any market consistently is destined for greatness. It does seem very difficult right now to call the market.
In that context, new house sales and approvals may already have bottomed, if we look at the latest data. For a country with insufficient housing and looking to migration to solve major labour shortages, its vital to get more dwellings built, as early as possible.
Most interviewees talked up the role of Government in supporting the housing sector, and there are some looking for action on the new National Housing Accord as a means of getting the sector moving again.
In the absence of that, most consider the sector will be over-capacity, especially when steel’s new capacity is factored into the total market.
Our Principal Partners
