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Top 4 Trends in Australian Construction Industry

Reflecting the downturn in the mining sector in the last five years, construction activity in Australia has been modest through 2015 and much of the 2016. Over the forecast period of 2016-2020, the industry is expected to remain sluggish, however a pick-up in infrastructure investment might just be what’s needed to contribute to positive annual growth towards the end of the period. The increase of government spending on the education and healthcare sectors, as well various infrastructure programs such as the Investment Road and Rail Program, the Black Spot Program, the Roads to Recovery Program and the National Highway Upgrade Program, will support the Australian construction industry. To that effect, let’s take a look at the main trends in the Australian construction industry today.

Appealing modular concepts

Modular commercial building, modular homes and even pack-your-own-home concepts have seen more followers and advocates in the real estate and construction sector. Younger professionals and millennials are constantly looking for ways to change things around and move from one place to another. While demand for modular homes is increasing, they have yet to gain popularity in unoccupied urban areas. They’re still relegated to remote places, suburbs and areas where they can harmonize with nature. Their main advantage is that they can be developed off-site, which reduces the impact on the neighbourhood and the original landscape. On the other hand, being more efficient and faster to build, they reduce the risk of incidents and disturbances in residential areas. They are more affordable to build as the crews already know what to do and how to assemble them, reducing the work hours.

Connectivity and the Internet of Things

There is a growing need for contractors, builders and clients to be connected all the time to keep up with the constantly shifting construction industry trends. Still, being online does not always mean adding or following more communication channels. It’s about increasing the productivity and efficiency of the tools we already have. The technology will only get smarter, allowing parties to share photos, documents, data logistics, inventory lists and remote vehicle detection. An emerging trend in Australia is using virtual reality (VR) equipment to simulate a project, so you can showcase the interior to customers even before the first shipment of material is delivered to the site. The extent to which today’s construction projects are digitalized will ultimately lead to a point where paper won’t be needed any longer.

Equipment hire instead of purchase

The diversification of construction projects demands for using machinery and equipment that is best suited to the current situation. It’s an unwritten rule in the construction industry that if a piece of machinery is used less than 30-40 percent of the time, renting is more feasible than purchasing. In addition, partnering with an Australian rental firm that is up to date with the latest technology gives your workers an opportunity to gain experience with new machines and make head-to-head comparison between the brands. The hiring trend is especially visible in the state capitals, which carry the bulk of new construction projects. So, for example, a construction startup looking for a crane hire in Brisbane is given a chance to choose a model that best suits their current building project.  

Competitive Asian economies

According to the McKinsey Global Institute 2016 report, Bridging Global Infrastructure Gaps, China’s spending on economic infrastructure leaves North America and Western Europe combined behind. Following their rapid population growth and ceaseless urbanization, growing Asian economies have developed an unprecedented scale for speed in construction. Emerging economies in that part of the world have resorted to accelerated prefabrication systems, which allow the government or private contractors to keep up with the infrastructural demand. With such a competition ‘in the neighbourhood’, Australian firms might have to incorporate more cost-effective solutions, such as the inexpensive import of prefabricated building elements and infrastructure materials from Asia.

Observing the current trends in construction industry in Australia, we see all the elements that characterize a healthy business environment recovering from the recent stall. The regional situation such as the growing competition in Southeast Asia, but also the government infrastructure programs, contribute to a lucrative construction and real estate market that Australia has never ceased to present.

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