Seize Current Market Opportunities
July 24 Industry Update

Why Are We Currently Experiencing Market Challenges?

Global Economic Factors:

Global events often indirectly impact the Australian and New Zealand trades and construction industry. Political unrest and, unfortunately, war create a domino effect internationally, impacting supply chain distribution. When you add rising living costs and interest rate fluctuations, you have the perfect storm. Clearly this has impacted housing affordability and construction activity, creating uncertainty for some consumers.

Regulatory Burden:

Complex and often changing regulations can be costly and time-consuming to navigate, hindering project timelines and profitability. For many business owners and project managers, it will often feel like a battle with ‘red tape’ policy, just to complete scheduled projects.

Skills Shortages:

The persistent lack of skilled tradespeople continues to drive up labour costs making it difficult to meet project demands. Although skilled migration will provide some support. Our future construction pipeline indicates we are falling more than 90,000 trade workers short of requirements.

Increase Competition:

A reduction in building approvals naturally decreases the supply. Fewer approvals lead to a smaller pool of new buildings entering our markets. This limits the available project pool for builders and contractors. In some cases, pivoting to renovation and existing work becomes a necessity. As a result, market competition increases, with more businesses quoting on each job or project.

Where are the Best Opportunities for Trades and Construction Businesses?

Technology:

Embracing technologies like AI, Building Information Processing (BIM), Internet of Things (IoT) and drones can improve efficiency and considerably decrease operational costs. When technology is implemented correctly output increases along with gross profit margin. For industry leaders, innovation through technology is now a core practice and critical for creating a compelling market point of difference.

Sustainability Focus:

The growing demand for sustainable buildings presents opportunities for trades that offer eco-friendly solutions. As we shift towards environmentally friendly practices, increases in government funding and support have become a reality. Consumers are also encouraging eco-friendly materials when provided a choice, supporting a reduction in greenhouse gas emissions that can combat climate change.

Infrastructure Investment:

Government spending on infrastructure projects creates a steady pipeline of work for many trades and construction companies. Below is a snap shot of major approved projects across Australian and New Zealand, according to ConsultANZ.

Top 3 Australia’s Major Infrastructure

1. The Suburban Rail Loop (VIC $125 Billion)
2. Melbourne to Brisbane Inland Rail (National, $31 Billion)
3. Sydney Metro (NSW, $25 Billion)

Top 3 New Zealand’s Major Infrastructure Projects

1. City Rail Link (Auckland $5.493 Billion NZD)
2. East West Link (Auckland $1.85 Billion NZD)
3. Otaki to North of Levin, New Highway (Otaki, North Island $1.5 Billion)

Additional opportunities will certainly be created with a projected $7.1 Billion allocated for Queensland venue infrastructure, leading into 2032 Olympic Games.

Modular Construction:

This trend is gaining traction, offering potential for faster and more efficient building processes. We are now witnessing high-end modular homes and buildings being designed with top-tier materials and extravagant finishes competing with traditional high-end constructions.

Workforce Development:

Investing in employee training and development will help address skills shortages and build high-performing teams. It all starts at grass roots; this means encouraging more apprentices to commence and complete their trades. Businesses play a vital role in ensuring workplace environments encourage learning and develop quality future trades professionals.