Mining slowdown puts brakes on demand for local services
GLADSTONE'S smaller businesses have been booming thanks to the big industry boys in town - but now they're wondering what's going wrong.
Medium and large employers have been forced to lay off staff due to a slowdown of demand from the main players.
Forgacs Engineering told The Gladstone Observer it had halved production in the past year as demand from mining industry backed off.
It comes despite big projects picking up pace on Curtis Island and at WICET.
Australian Manufacturing Workers Union organiser Phil Golby said his union's workers had definitely noticed the decline.
"What we've found is a lot of already existing businesses in town have lost their usual market, or it has simply dried up, due to market pressure," he said.
Mr Golby said the situation is a "managed slowdown", mainly by the "major multinational companies that are dictating the economy of Gladstone".
"Rio Tinto aren't spending money; they've been told to cut operating costs."
Last week Rio Tinto confirmed several staff had been made redundant at Yarwun.
Meanwhile, Mr Golby said the LNG boom hadn't delivered work to local manufacturers.
"Bechtel and other construction related companies are relying on overseas manufactured products. This directly reduces the ability of local people to find continuous permanent employment."
Outside of industry, workers' hangout the Reef Hotel has seen the flow-on effects.
"Traditionally January and the first part of February are quieter, from our history," manager Anthony Parmenter said.
But more workers in camps, and less in town, meant weekday trade had slowed down.
"Around this time we still had the workers on the mainland, now they're over on Curtis Island, but weekend trade hasn't been affected at all," he said.
Secretary manager of The Yacht Club Brian Dawson agreed that week day crowds were thinner.
"(The slowdown) in Monday to Friday I think is because income is not where it was last year," he said.
Contracting clients claim industry is in 'ditch'
A LOCAL manufacturing company has seen production reduce since this time last year due to a downturn in the mining industry.
Forgacs Engineering builds large mining truck trays and currently has 24 ready trays in-field.
"In previous years, we fabricated about hundreds of this per year, now about half of the amount," general manager Csaba Nagy said.
The business serves the mining industry in central and north Queensland and even Papua New Guinea.
"The mining industry is basically in a ditch, according to our customers," Mr Nagy said.
"The mines are holding back their schedule, until it's really urgent for them, so they're not spending too much on new machinery.
"All the customers think probably that May or June it will speed up again, and start rising. All of us are just hoping it's right."
Mr Nagy knows of businesses that are shutting down and laying off staff, but Forgacs is safe for now.
"I have work enough, just enough to keep them, but okay, they don't have much overtime, so they could go to the island," Mr Nagy said
Mr Nagy agrees some industries are better off.
"Because we're serving the mining industry, we don't have too much on, but on Curtis Island, LNG, everything is speeding up."
Region's large employers
- Bechtel currently employs more than 8000 people.
- At peak, expected at the end of 2013, Bechtel will employ 9000.
- Bechtel's local workforce is 50% of total employees.
- Bechtel's "expat" workforce is 4%.
- The $2.5billion Stage 1 WICET is under-construction and expected to be completed late 2014.
- WICET development will peak at 800 workers on site.