According to a report recently completed by the CSIRO, there are a number of trends impacting the future of the Australian construction industry. For business owners, it’s important to stay ahead of the game, in all aspects of the business.
Below are the top five construction trends shaping Australian employment, industries and economies in 2017, specifically within the building industry.
1. Housing Unaffordability in Australia
Demographia’s 13th Annual International Housing Affordability Survey (2017) deemed the Australian housing market ‘severely unaffordable’. The study rated Sydney as the second most unaffordable housing market in the world under Hong Kong, meanwhile Melbourne came in sixth.
The average size of each household continues to decline, while the population increases, forcing much of the market to look for cheaper housing alternatives. Inflation continues to affect the construction industry, with heightening costs surrounding new developments and maintenance of infrastructure.
2. Aging Workforce and Skill Shortages Affects Infrastructure Productivity
The ageing workforce is unable to keep up with the physical demands of onsite jobs within the construction industry. Mature tradespeople are in demand for their abilities but with their ages comes other health implications.
Skill shortages in the Australia labour market shows within the new generation of apprentices. There are fewer men and women who see construction jobs as desirable, leading to skill shortages and higher wages.
3. Rise in Unpredictable Weather
Extreme weather including heat waves and storms are causing significant negative impacts on the construction industry. These impacts are expected to increase, which cause setbacks on projects. With temperature averages predicted to increase all year round, the construction industry is likely to suffer most.
4. Poor Investment Planning in Australian Infrastructure
US Based Project Management Institute found Australia was below the global average with $108 Million wasted for every billion dollars spent on infrastructure.
The report, the Public Infrastructure Financing: An International Perspective (The Productivity Commission) suggested improvements to finance public infrastructure, manage incentives and examine risks during contract negotiations. The growing deficit calls for better investment planning and allocation of resources.
5. Competition from Growing Asian Economies
Emerging Asian economies, along with population growth and rapid urbanisation, created an unprecedented need for speed in construction. Asia has developed accelerated prefabrication systems to keep up with infrastructure demand. Australia may be pushed towards more cost-effective developmental solutions, such as the cheap import of prefabricated buildings and infrastructure components from Asia.
Sources: CSIRO Report – Farsight for Construction
Demographia’s Annual International Housing Survey
The Productivity Commissions Report
Buildsoft – Construction Trends