What is the general outlook for the Australian construction sector? For many in the industry, this question is more than just a passing interest or topic of conversation.
The future of Australian construction will have a large impact on many businesses and individual careers, and if you keep a close eye on where the sector is headed, you’ll be in a better position to make critical decisions for your organisation.
In this post, we’ll take a look at several key indicators that help us to understand the current state of play and what we can expect in coming years.
Current Construction Worker Shortage
Skilled construction labourers are in short supply in several Australian locations. New South Wales, for example, is experiencing a shortage of forepersons, project engineers, contract administrators, estimators, structures and finishes forepersons and senior site managers.
Queensland is another area that is experiencing shortages, especially in the domestic housing construction sector. The area needs civil project engineers, commercial estimators, commercial site managers, traffic design engineers, project managers and contracts administrators, among other professionals.
These shortages mean positive demand for Australian construction professionals. But it also shows the challenges that construction companies are having when it comes to finding experienced, professional workers.
Growing Capital Investment
Over the past year, Illion’s Capital Investment index rose by a quarter, which is expected to translate into greater capital investment for private-sector projects in the near future. In fact, forecasters from BIS Oxford Economics and Housing Industry Association say they’re optimistic about the current residential building boom. They’re also hopeful that the boom will achieve a “soft landing” after its peak.
In addition to increased capital investment in the residential housing industry, we’re also seeing increased investment in the commercial sector. Part of this investment comes from rising momentum with road and rail projects and new telecommunications infrastructure.
A Source of Pressure: Labour Costs
Many Australian construction companies are getting more contracts, but with the tight labour market, it can be difficult to deliver on this work.
Major construction projects are increasingly competing for the same pool of skilled labourers, especially in areas where there’s already a labour shortage. If you’re looking for workers, consider offering incentives or pay increases for the duration of important projects.
With major changes in the way Australian companies do business, construction companies are finding that clients are demanding new kinds of properties.
For instance, online retailing has immediate needs for small warehouses. Demand for shopping centres is falling because of changing consumer behaviours, but construction companies are finding opportunities in small warehouses for fulfilment.
Office vacancy rates have continued to drop in several locations in Australia, including Sydney and Melbourne. Brisbane and Perth are also experiencing tightening conditions. Therefore, the Australian construction sector will likely be looking at growth in office and commercial construction in years ahead.
Aged Care Construction
As Australia’s population continues to age, more and more people are in need of services from aged care facilities, and many construction companies are becoming involved with the design and construction of these projects.
There was a slowdown of aged care construction during 2016 and 2017, but there are signs pointing to an upswing of activity in this sector for 2018. This is an exciting area of opportunity because developers are exploring many innovations. Many aged care facilities are experimenting with new layouts and design, increased environmental sustainability and facilities that help residents to live fuller, richer lives.
With so much opportunity on the horizon, Australian construction firms are in a great position to expand their operations or move into new territories. Again, the biggest challenge right now for most companies is finding enough workers to complete projects.
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