REGIONAL construction sites are "likely" to close as suppliers grapple with metropolitan COVID-19 closures, the Australian Industry Group has warned.
Big home-building companies in regional Victoria may not have sufficient supplies to keep operating through the two week shutdown, Ai Group's Victorian regional manager Jim Dannock said.
"This is because many city-based manufacturers supplying to the building industry are finding that with their metropolitan customers closed by the Melbourne building industry shutdown, it is simply not viable to continue to operate," he said.
"The scale is simply not there to keep manufacturing lines operating for regional customers alone as it becomes too costly."
Mr Dannock urged the government to stick to its word about reopening the industry and make sure regional suppliers will still be able to deliver to construction sites when restrictions are lifted.
Any site shutdowns in Bendigo would impact the city's second biggest industry.
The industry has so far been a linchpin of Bendigo's economy during the pandemic and has even grown in value, newly released tracking data from consultancy REMPLAN shows.
The agency estimates the sector now had an output of $177.3 million in June, compared to $176.7 million the month before COVID-19 arrived in Australia in March 2020.
The shutdowns could also compound any economic damage caused after the state lurched into new lockdowns in the second half of 2021.
Australia's economy could contract by four per cent in the September quarter, Westpac's chief economist Bill Evans said.
He expected a modest 1.6 per cent recovery in the December quarter as social distancing restrictions eased in Victoria and New South Wales.
"By December we would be expecting to see signs of this recovery in the leading index as it paves the way for a very strong rebound in 2022," Mr Evans said.
Westpac expects growth to surge by 7.4 per cent next year.
In the meantime, protests over the construction industry lockdowns have continued, though violent confrontations with Victoria police have not spread outside of Melbourne.
Police were forced to disperse a crowd to take control at Melbourne's Shrine of Remembrance on Wednesday.
RSL Victoria has blasted those protesters who gathered there, saying anyone who gathers there for political purposes is completely disrespecting the sanctity of the space.
"Under no circumstances, ever, should the shrine be a place of protest," the RSL said.
Police arrested 215 people during protests in Melbourne's city centre over the course of the day.
Two officers sustained head injuries after they had bottles thrown at them and another was taken to hospital with chest pains.
- With AAP
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