Australian construction industry at ‘pivotal point’

Unprecedented construction activity is being seen across all sectors and in all Australian states and territories, according to a new report from Rider Levett Bucknall.

The September 2022 quarter report from the global construction, property and management consultancy said the Australian construction industry is at a “pivotal point” with decade highs in the value of work yet to be done, commencements and projects under construction.

According to the report, the value of work yet to be done has risen rapidly to a record high of $187 billion (as at 31 March 2022), 39% higher than the quarter before. The value of these works in progress (cost to complete) has also risen by $41 billion to $228 billion, with all states contributing to the increases.

“This adds pressure on the already stretched workforce to complete the current undertakings and to provide sufficient resources to new projects commencing,” RLB director Domenic Schiafone said.

“With already significant levels of work not being completed, the industry’s current and future capacity to deliver projects on time, on budget and on specification is fundamental for all property development decisions, but these principles are now under stress.”

Looking ahead, the report said pressure points in supply chains should start to ease, with global demand softening amid the economic downturn. This easing of demand should allow manufacturing and logistics to get back to “normality” as material prices soften with the reduction of “demand-led price premiums”.

“Given the significant rise in both commencements and work yet to be done for 2022 across the country, strong activity should be seen in 2023,” said Mr Schiafone.

Adam Zuchowski is a disputes lawyer and principal at Sutton Laurence King Lawyers.

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