Despite growing concern around the industry and the collapse of multiple construction businesses across Australia, eight in ten (81%) senior business leaders in construction surveyed, agree that the construction industry in Australia is stable.
The inaugural Kennards Hire Construction Confidence Check, suggests that senior business leaders in the construction sector surveyed are most likely to say that the rising cost of materials (47%), supply chain issues (46%) and skilled labour (42%) are the biggest causes of concern that could impact the stability of the construction industry today.
Other common challenges reported to cause issues are poor productivity from delays due to weather, breakdown of equipment and late deliveries of materials (36%).
However, on the positive side, eight in ten (82%) senior business leaders surveyed in the construction sector say that their business is now more financially responsible and prepared for unexpected costs in their business as a result of the events of the past two years including the COVID-19 pandemic, bushfires, floods and droughts, with 44% saying their business is a lot more financially responsible.
The findings from the 2022 Kennards Hire Construction Confidence Check are the result of a survey conducted by YouGov Galaxy from 19th – 30th April 2022.
The sample comprised 259 senior business leaders from construction businesses with 20+ employees.
Following the completion of interviewing, the data was weighted by age, gender and region to reflect the latest ABS population estimates.
Victorian and New South Wales construction leaders surveyed were most confident the construction industry in Australia is well-placed to withstand pressures on the sector and will continue to grow.
Nationally, infrastructure (27%), residential property (23%) and commercial property (17%) are the industries most likely to be seen by those surveyed as driving stability and growth in the construction sector over the next five years.
Kennards Hire general manager commercial Tony Symons said: “Despite the number of construction companies reported to be folding, our research shows business leaders in the construction industry show a remarkable amount of confidence in the sector.
Supply chain issues however still remain a pain point for many at the bigger end of town impacting the ability to deliver projects on time and on budget.
With the profit margins these companies operate on and the rising focus on sustainability the rental market can assist in managing costs and positively contributing to the circular economy.”
Digital Skills in Construction.
The vast majority (96%) of senior business leaders in the construction sector surveyed believe that digital skills will be important to optimise business operations in the construction sector with leaders suggesting digital design & visualisation (45%), data analytics (40%) and digital marketing (37%) will be most important to optimise business performance.
Other digital skills senior managers think will be important to optimise business performance include social media (35%), digital business analysis (35%), cybersecurity (27%) artificial intelligence (25%) and the internet of things (20%).
Those working in larger organisations with 100+ employees are more likely than those working smaller organisations of 20-99 employees to say that data analytics (50% compared to 32%) and artificial intelligence (36% compared to 17%) will be most important to optimise business operations in the construction sector.
Leading data analyst firm IbisWorld estimates Australia’s Rental sector to be worth $8.3 billion.
This is a substantial driver towards Australia’s construction industry and the sector’s growth in recent years has been seen as a sustainable way to combat supply chain issues for equipment on site.
Senior business leaders in the construction sector surveyed, report the most important considerations for their business when making decisions to purchase and/or rent construction site equipment are cost (62%), safety (46%) and project performance (45%).
Senior managers in NSW are more likely than those in Victoria to say that supply chain (50% compared to 32%) and availability of equipment (44% compared to 27%) are the main considerations when making decisions to purchase, or rent construction site equipment.
Those working in larger organisations (100+ employees) are more likely than those working in smaller organisations to report that cost (71% compared to 56%), safety (53% compared to 40%), supply chain (52% compared to 40%) and availability of specific equipment required (51% compared to 35%) are the main considerations when making decisions to purchase and/ or rent construction site equipment.