What is the state of Australian construction industry?
Despite significant headwinds, 85% of Aussie respondents remain confident about the 12 months ahead, up from just 43% in April 2020. While optimistic, Australia lags behind the APAC average of 91% and is at the back of the pack when it comes to tech adoption.
“The Australian construction industry remains remarkably resilient, however, there are lessons to be learnt from our Asia Pacific neighbours. Our research found a clear correlation between positive industry sentiment and the intention to adopt technology, with ASEAN nations taking the lead in this area,” said Tom Karemacher, VP, APAC at Procore Technologies.
“This enthusiasm should be instructive to the Aussie construction industry, underscoring the power of digital transformation in relieving key industry pressures and supporting growth.”
The report highlights that, despite battling skill shortages, construction bans, and increasing cost of materials over the past two years, these challenges continued to serve as a catalyst for technology investment, with more than two in five (43%) Australian respondents agreeing the pandemic accelerated their adoption of digital technology. This is a steady increase from the 39% that updated technologies, systems and processes in 2020.
However, there are still clear barriers to digitalisation, the most significant being changing established practices and behaviours. The research also revealed a very pragmatic approach to technology adoption within the Australian construction industry.
According to the respondents, cutting edge technologies – such as 3D printing, robotics and drones – are less likely to drive industry change than more tried-and-true technologies, such as big data and digital project management platforms. Australian builders expect to save an average of 13% on total project spend just by managing data more efficiently.
Looking across APAC, Australia is behind on the digital maturity curve—with lower adoption rates of everything from BIM to big data, and pre-fabrication to robotics. A smaller percentage of Australian construction companies plan to adopt digital tech than their regional peers. For example, New Zealand businesses (46%) are almost twice as likely as their Australian counterparts (24%) to believe next generation BIM technology will drive change.
Hannah Morton, associate at global sustainable engineering consultancy Cundall, said, “The challenge is to bring all parts of the industry along on this journey. I believe technology is an asset in this at every stage from early feasibility, design development and modelling through to project management, procurement and post-construction commissioning and verification.”
What were the key insights of Precore’s study?
Although behind on digital adoption across the board, out of all regions, Australia and New Zealand were the most likely to have site-specific safety plans, setting the bar high on health and safety. Additional highlights from the report include:
Australia reins in rework
The average Aussie construction firm spends one in every eight hours (12% of its time) on rework. This is down from 18% in 2020, and 43% of construction decision makers believe technology will help improve resource efficiency through fewer errors. Of all five markets surveyed, the Aussie construction industry spends the least amount of time on rework.
Sustainability priorities are lowest in Australia
48% of Australian respondents say the construction industry should adopt more green building practices, the lowest of all five markets surveyed and behind New Zealand at 64%.
Rising costs and skills shortage the biggest concerns
63% cited rising costs of materials and equipment as their biggest concern over the next 12 months (up from 40% in 2020), followed by skills shortage and decreasing profit margins.
Gender diversity needs improving
Diversity and innovation go hand in hand. However, while Australian construction companies have high rates of diversity and inclusion policy, on average, only one in five roles in construction are held by women. Furthermore, 61% saw no need to improve this.
Paper practices remain high
Paper is still commonly used by Australian builders for site activity records (29%), environment (27%) and estimating and pricing (26%) processes, regardless of business size. New Zealand businesses are less likely to use paper across each of these processes.
“Each time we conduct the How We Build Now survey, we see different challenges developing for the construction industry. At the core, the most resilient and ambitious companies leverage technology to drive productivity and profitability,” Karemacher added.
“Being our first APAC-wide report, we hope this provides companies a good understanding of where they sit in the industry and how they can develop by not only benchmarking themselves against their Australian peers, but also those in neighbouring countries.”
The third in an annual ‘benchmark series’, the research behind How We Build Now – Tracking Technology in Asia Pacific Construction in 2022 was conducted by YouGov.
After surveying the Australian industry for the 2019 and 2020 editions, this year it has been expanded to include five markets. 1,138 decision-makers and influencers were surveyed for this report across Australia (314), Malaysia (223), New Zealand (114), Philippines (259) and Singapore (228). The report was launched in Sydney on 31 May, at an event featuring YouGov, SafeWork NSW, Cundall, Meriton and Fletcher Construction Company.
Download the full report here.