Surging diesel prices are threatening to flow through to the cost of home repairs and renovations, with AMP Bank GO warning the added fuel bill across Australia’s construction workforce could approach $500m a year.
A massive $500m fuel shock is ripping through the construction industry, with tradies warning surging diesel prices will be passed directly to homeowners.
AMP Bank GO analysis shows the added fuel bill across Australia’s construction workforce alone could approach half a billion dollars a year if recent diesel price increases are sustained until the end of June.
The analysis was based on national average diesel prices remaining at 275c a litre until the end of June, compared with a pre-war average of 182.3c a litre.
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The average diesel price for April was about 70 per cent higher than in February, even with the fuel excise cut, representing a 25 per cent increase to fuel costs so far this year.
The bank is preparing to launch a 10 per cent fuel cashback offer for small business owners with an ABN or ACN, capped at $100 in May and $100 in June, as operators grapple with higher pump prices and rising supply costs.
Tradies say the pump pain is only part of the problem, with higher freight, materials and supply costs hitting at the same time homeowners are delaying repairs, renovations and building work.
Northern Beaches builder Stef van den Berg said he had not seen conditions this bad in 30 years, after cancelled jobs forced him to let go of a first-year apprentice.
Northern Beaches builder Stef van den Berg said he had been forced to let go of a first-year apprentice within weeks of hiring him after jobs were cancelled.
“I’ve been building on the Northern Beaches for 30 years and I cannot remember it ever being this bad,” Mr van den Berg said.
“I hired a first-year apprentice earlier this year, within weeks the jobs were cancelled, and I had to let him go almost straight away.
“Before Covid I had 15 guys. Now there are five of us, one big job since last year, and there’s just nobody ringing.
“Even the architects say they’ve never seen it this quiet.”
Mr van den Berg said builders had little choice but to pass on higher costs or risk going under.
“If I didn’t pass the cost increases on, my business would have gone under by now,” he said.
“But the moment you do, customers pull the pin.”
Quick Plumbing Solutions owner Justin Bartlett said four of his five big jobs had been shelved as fuel costs, interest rate rises and weaker demand hit at once.
Quick Plumbing Solutions owner Justin Bartlett said he was being hit by rising costs, slowing demand and higher interest rates all at once.
“I took on a second apprentice in January because I had the work,” Mr Bartlett said.
“Since then, four of my five big jobs have been shelved.
“Now I’m surviving on whatever’s left, the small jobs with no profit, while fuel costs and two interest rate rises have hit at the same time.
“It’s only going to get worse.”
Landscaping By Design owner Michael Ryan said rising fuel prices were going straight to the bottom line for businesses locked into fixed-price contracts.
Landscaping By Design owner Michael Ryan said fuel prices had gone straight to the bottom line for businesses locked into existing contracts.
“In just 30 days, the fuel crisis has added to our overheads, and because we’re locked into fixed-price contracts, we can’t pass a cent of that on,” Mr Ryan said.
“For a Sydney landscaping business running excavators and trucks across multiple sites every single day, that’s a hit that goes straight to our bottom line.
“And that’s just the cost of fuel alone. We’re still bracing ourselves for the flow-on impact to the price of supplies from all our wholesalers, that bill is yet to come.”
AMP Bank GO director John Arnott said tradies and service providers were being squeezed between rising fuel costs and customers already under cost-of-living pressure.
AMP Bank GO director John Arnott said tradies and other small businesses were being squeezed between rising costs and customers already under financial pressure.
“Tradies and service providers are trapped between rising costs and customers already under cost-of-living pressure,” Mr Arnott said.
“Our offer is about helping businesses stay on the road while fuel prices remain unpredictable.”
The cashback offer applies to fuel bought at most service stations using an AMP Bank GO Everyday Business Account debit card.
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