PHOTO: Australian economy
Australian investors were still rubbing the sleep from their eyes when New Zealand-based building products giant Fletcher Building delivered a worrying dose of reality on the outlook for the Australian economy.
Revenue in Fletcher’s Kiwi business collapsed to zero in April because of the country’s near-total COVID-19 lockdown, while revenue in its Australian business ran about 90 per cent of pre-COVID levels and was at least able to break even.
As the New Zealand economy has been reopened, Fletcher’s revenue there has returned to about 80 per cent of its May budget, in part because of a surge in activity aimed at completing unfinished work. In Australia, revenue is still running about 90 per cent of budget.
But Fletcher chief executive Ross Taylor is bracing for pain.
While government subsidies across the Tasman allowed him to keep his workforce intact, Taylor announced on Wednesday that he would cut 10 per cent of staff – 1000 workers in New Zealand and 500 in Australia – to get ahead of what he expects would be a 20 per cent slump in construction in New Zealand, and a 15 per cent fall in activity in Australia.
READ MORE VIA AFR
