In most nations across the planet, the construction industry plays a vital and significant economic role and Australia is no exception. The construction industry contributes significantly to the Australian GDP growth and is also responsible for keeping unemployment low as the industry provides employment for thousands of Australians.
The last few years decades saw the industry moving forward and expanding exponentially due to factors which included urbanisation, population growth, and also rising demand for infrastructure development. Population growth in Australia has been cited by industry observers as being among the key drivers of growth of the construction industry in Australia.
Population growth naturally has an impact on infrastructure, housing and commercial spaces which fuels construction as new residential buildings, schools, office complexes, hospitals, and even transportation networks are needed to sustain the increase in population.
Apart from population growth, another primary driver that pushes construction forward at a constant pace is urbanisation. Urbanisation plays a significant and definite role in moving the construction industry forwards mainly due to the fact that when more people move to or move closer to large cities such as Melbourne for example the demand for urban infrastructure naturally skyrockets as well.
This is actually one of the reasons as to why most of the construction projects revolve around the development of high-rise buildings and transport systems such as the metro tunnel project and the Southbank by Beluah project. These factors coupled with the Australian government’s focus on infrastructure development in order to enhance the appeal of cities such as Melbourne as a top class tourist destination are key drivers.
From another perspective, the construction industry is not without its own set of challenges and among the bigger challenges faced by the industry is the shortage of skilled labour and despite the fact that the pandemic is over more or less, the industry is still short in supply of skilled labourers. In order to import foreign skilled labour the cost is high and this further increases project costs and project delays.
Another challenge that construction companies face is the requirement for equipment and machinery to run projects that are expensive and has a negative impact on a construction company’s cash flow. Although there are many large construction equipment rental companies, such as Scoop Hire Melbourne for example, that offer machines such as cranes, skid steers, dumpers and excavators for hire, the current demand for such equipment is significantly higher than the capacity to supply such equipment which forces some companies to buy these machines at very high costs and in the process incur ownership costs.
Other challenges include the increasingly tighter regulations on safety at construction sites. It is no secret that the entire construction industry is acknowledged to be a high risk sector due to workplace incidents and this has led to the tighter regulations which include mandatory training and certification programs which again increase project costs and often cause project delays.
Resistance to change by aging construction workers such as crane operators or excavator operators is also seen as a challenge due to the reluctance of older workers to accept and use new technologies that come with these new machine models.
