Builders in Australia: Four key topics you need to know about

As a result of the economic pressures generated by the COVID-19 pandemic, home and land buyers in Australia have become increasingly more discerning about their home and investment property purchases.

In order to stay ahead of the pack and to survive the key challenges facing the industry at this time, builders need to demonstrate skill, perseverance and a commitment to excellence above and beyond what the industry has seen before.

Whether building a new architecturally-designed home, display home, commercial build or undertaking a renovation project, the Australian construction industry is at a pivotal point.

At a glance, here are four key topics shaping the construction industry at present, and how builders Australia-wide should be approaching their projects going forward.

1. Key industry challenges

Labour shortages

Labour shortages are affecting every industry in every part of the world, and home builders in Australia are no exception. The skills shortage in construction has become incredibly tight.

In Australia, numerous states are experiencing labour shortages for electricians, plumbers and carpenters and have been since 2020. Further to this, accurate data on the true extent of the labour shortage in the construction industry is not easy to track accurately.

Rising material costs

Disruption to supply chains and shortages for particular materials is pushing up prices for building materials, and fixtures and finishes for building projects.

Fixed price construction projects are no longer an option for builders and home buyers or renovators, due to the fluctuating prices of materials and supplies, which can blow out the cost of a project dramatically.

Steel, timber and plumbing materials, to name a few, are some of the key products with a high inflation rate, pushing up the price of construction projects in Australia.

The rate of inflation of these products is putting pressure on builders in Australia to put up their prices in order to stay afloat in such an unpredictable market.

Workplace safety

Home builders in Australia understand that this is a demanding industry to work in – both physically and mentally.

While the Fair Work Commission has stepped in to lend builders working in Australia more equitable and even-handed advantages for the work that they do, the truth is that safety needs to be intelligently balanced against the stringent demands and deadlines facing every project – from display homes to land clearing.

2. Key areas for growth

Commercial

Demand for commercial buildings in Australia continues to grow. A recent report by Global Data suggests that office space and leisure facilities are as much in demand today as restaurant sites and auction houses.

Post-COVID, Australia’s economic recovery hinges on careful planning in order to deliver successful outcomes – this means that builders in Australia who commit to these projects will need skill, timeliness and precision in order to succeed.

Residential

Despite many forecasting a housing market crash due to rising interest rates and price inflation of essential items, demand for property remains high on Australia’s agenda.

Australia’s housing market has surpassed $10 trillion according to recent data from the Australian Bureau of Statistics. Yet if the Reserve Bank of Australia continues to hike interest rates, we may yet see a downturn in property prices.

Retailers

There’s no doubt that e-commerce boomed due to the pandemic and the convenience that online shopping presents.

But, recent research from Monash University and Emarsys highlights that while the e-commerce market is booming, consumers still prefer in-store experiences.

The Australian Bureau of Statistics states that retail turnover rose 0.9% in May 2022, reaching record levels.

Department stores had the largest rise, followed by cafes, restaurants, and takeaway food services.

The upshot of this is that physical retailers in Australia aren’t going away any time soon.

3. Key education areas

Design

Creating good supplier relationships with architects and new home designers is essential for building companies to remain competitive and grow.

Well-established organisations like the BDAA are adamant that through collaboration and communication, issues such as the labour shortage can be overcome.

Moreover, builders need to understand how green product manufacturing, creating disaster-resilient buildings, sustainable home design and creating social sustainability are all key factors to invest in for the businesses of tomorrow.

Installation

Construction is so much more than putting together a structure. Consumers are becoming increasingly discerning about the products that are being used to build their homes – in terms of consumer health, environmental impact and performance metrics.

This includes not only the grade and durability of the materials being used for new home installations, but also their performance in terms of green rating and energy efficiency.

Maintenance

The finest new home in all of Australia won’t mean much if it falls over as soon as the season changes.

Not only is there a need for education on best practice for home maintenance for homeowners, but construction and maintenance workers also need to keep pace with the ever changing regulatory frameworks and stringent best practices in this area.

4. Key products for the building industry

Software

Software is a key component of a new home build, from conception to design and construction.

The digitalisation of processes and procedures in the construction industry is radically transforming the face of the industry on an ongoing basis.

Keeping abreast of software developments and automations can help home builders be on top of their game in creating efficiencies in their processes and offering better customer services to consumers.

Machines and tools

Forecast to sustain a CAGR of 3.34% throughout most of this decade, the construction machinery industry in Australia is actively growing.

Concurrent with this, builders in Australia are coming to grips with newer and more advanced tools and machines than ever before.

Smart technology and IoT systems are bringing a level of intelligence to many of these devices, and this rapid technology disruption in the industry is fast becoming part of life.

Computer and electronic equipment

Relating to the above, the idea of doing anything but digital in new home design or working land packages today simply isn’t on the cards. From communications to design programs and advanced material resilience forecasting, builders employed in construction work in the current age are required to be as handy with a hard drive as they are a hammer or hacksaw.

Naturally, this implies something of a generational divide, and further reinforces the need for the industry’s labour shortage to be remedied by Millennial and Gen Z Australian construction workers – both on site, and in in the office performing leadership roles.

You think that sounds clever? Wait until you meet the construction industry’s new AI.

Safety gear

Builders in Australia have an onus to provide a safe working environment for their employees and subcontractors and to ensure all work being carried out is safe.

Australia has stringent rules and regulations around safety in construction and builders are highly mandated in this area.

Technology is playing an ever increasing role in how construction works are undertaken – and this includes safety equipment and personal protective equipment – from wearables to trackers and more resilient and comfortable materials designed to keep contractors safe on-site.

Safety has come a long way since hardhats and safety glasses – sites are now equipped with drones, site sensors for hazardous materials, exoskeletons for heavy lifting and much more.

Construction in Australia is always evolving

From the skills in demand, to the tools that make the work happen, the construction industry in Australia is becoming increasingly sophisticated.

With demand growing for a shrinking pool of skills, this is an industry whose next few steps could well prove pivotal – and we will be here every step of the journey for support, advice and thought leadership to help your business succeed.