Aerial view of construction site

Industry insiders fear for the health of construction

Published: 28 September 2020

Earlier this year, the AMCA and other industry associations assisted the University of Melbourne to undertake a research project on the health of the Australian construction industry, which has found that more than half of the industry insiders surveyed thought the sector was not healthy or sustainable.

Undertaken by a research team from Melbourne Law School with support from the Society of Construction Law Australia, the Australian Construction Industry Forum and the Australasian Procurement and Construction Council, the project aimed to ‘take the temperature’ of the industry and identify areas which might benefit from further research and consideration. 

Part of the study involved surveying a group of construction industry professionals, lawyers and students.

A report on the project’s key findings has been released, which shows that:

  • 55 per cent of survey respondents were of the view that the Australian construction is not healthy or sustainable
  • 50 per cent of respondents were optimistic about the future of the industry
  • Survey participants estimated that there could be a significant financial benefit to industry and the community of between 5 and 15 per cent if industry behaviours, attitudes and, practices could be improved.
  • The two changes industry believe have the greatest potential to drive positive change were more appropriate risk allocation and the adoption of more collaborative practices – these were more significant than any other potential changes.

Co-lead author Professor John Sharkey said: “The construction industry in Australia generates over $360 billion in revenue, producing around nine per cent of Australia’s Gross Domestic Product.

"In 2019, around 1.15 million people were employed in the construction industry – that's nine per cent of the Australian workforce. Governments at all levels spend a significant amount on construction and infrastructure, and this amount is increasing.

“Given this landscape, it is appropriate to pause and consider the health of the Australian construction industry, particularly given the important role the industry will likely have for Australia’s economic recovery from the COVID-19 pandemic.”

Melbourne Law School Enterprise Fellow and co-lead author Mr Phillip Greenham said that improvements to the industry will not only benefit the industry itself but will also maximise prospects for the wider community.

“Reducing the cost of construction can generate very significant benefits for the community, particularly in a time of high levels of government spending on construction and infrastructure,” Mr Greenham said.

“Reducing the occurrence, complexity and cost of disputes, through enhanced collaboration and balanced risk allocation, will result in more money being available for the actual projects and greater predictability as to outcomes.”

Download the full report here.