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Inflation fallout creates knock-on chaos for small businesses

April 13, 2022

Inflation fallout creates knock-on chaos for small businesses

Rampant inflation has already left Australia’s construction sector with fresh cost anxieties, but the increasing prices have created a sizeable secondary problem: rising theft rates.

Rampant inflation has already left Australia’s construction sector with fresh cost anxieties, but the increasing prices have created a sizeable secondary problem: rising theft rates.

Supply chain challenges posed by the pandemic and its related lockdowns put a rocket under the price of key construction materials, notably timber, with September quarter inflation for these goods hitting its fastest pace since GST was introduced in 2000.

Data from Corelogic shows prices of timber, plumbing parts and metal products ticked up 3.8% during the three-month period, bringing the annual rate of change up to 7.1% – the largest annual increase since March 2005.

With materials in demand and prices high, theft from construction sites has also spiked, and  burglars have made off with everything from piles of timber to a 7m-long fibreglass pool.

Gerard Dyson, managing director of smart security platform Spectur, said on average two out of five construction sites get burgled every year, “so you have a 40% chance of theft or vandalism, which is a huge number – and the average dollar value [of these incidents] is $30,000”.

“It’s not a small matter. You have a 40% chance of having to spend an extra $30,000, and you can end up spending more than $250,000 in some cases as well.”

Beyond the cost of repairing damage or replacing stolen goods, there are “all the indirect costs caused by delays, which if people have liquidated damages can be quite phenomenal”.

Dr Dyson said one of the difficulties companies face when trying to limit theft is the prohibitive cost of security – one of the challenges his company Spectur is seeking to alleviate with its AI-enabled security camera systems, developed leveraging AI technology from CSIRO’s digital research network Data61.

Rather than just record a crime taking place to assist in the investigation afterwards, Spectur’s solar-powered units use AI technology to largely eliminate false alarms, identify suspicious behaviour and proactively respond – notifying security teams and using on-board lighting and speaker systems to warn the perpetrator their presence has been detected.

“What we provide is a virtual security guard and he costs anywhere between $8 and $30 a day, but he’s there all the time and he never gets tired, never gets hungry, and never goes for a toilet break and can’t be bribed and he records everything perfectly,” Dr Dyson said.

And by alerting would-be thieves before they cause damage, Dr Dyson said the system reduces the incidence of crime by roughly 90% – and in the 10% of cases where damage or theft still occurs, the financial cost of these incidents is reduced by a similar margin.

To stay up to date with Spectur’s news and announcements, register your details here.

Reach Corporate provides Corporate Advisory Services, including managing investor communications on behalf of Spectur Limited and will receive fees for its services.

Sources


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