Key construction trends for 2019

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BIS Oxford Economics’ Adrian Hart outlines key challenges and opportunities

BIS Oxford Economics' Adrian Hart

A case for reinvesting in mines; strong growth in rail, telecommunications and renewable energy generation; and skilled labour availability are some of the key challenges and opportunities for Australia’s civil construction sector, according to Adrian Hart, construction, maintenance and mining associate director at BIS Oxford Economics. Hart spoke on this topic recently at the National Construction Equipment Convention in Sydney.

In discussing challenges to prepare for, Hart cites unpredictable market fluctuations driven by explosive growth in multiple sectors as an area of key concern.

"The biggest challenge is the high level of volatility we’re seeing in the market overall," Hart says.

"Going forward from here, I think the challenge will be to try and provide a more sustainable, smoother pipeline of work into the future.

"But I suspect we’re going to see a lot more cycles before this all plays out."

Hart highlights rail as the sector to watch, but it still remains to be seen whether the industry can effectively execute on the huge number of projects.

"We don’t expect to see rail construction activity peak until the early 2020s," he says.

"But that’s subject to the risk of whether we have the capacity and capability to deliver all this rail work in such a short space of time."

In terms of equipment supply and demand projections, Hart advises that construction companies prepare for increased equipment demand, and the higher prices that come with it.

"There’s going to be a challenge in certain markets where we may not have the equipment that we need, when we need it. So we’ll be paying probably a bit more for it."

Digging deeper into skilled labour availability, an aging population will carry the risk of workers staying in roles longer, and therefore becoming harder to replace when they eventually leave.

"The population aging story is one that will continue to impact on the industry over the next 10 years, and we’re going to need people not just to meet growing demand, but also to replace those that have had many years or experience leave the industry," he says.

Failing to take heed of industry trends and economic indicators can lead to avoidable mistakes in construction planning. Some of the most common mistakes ultimately come down to communication issues and unrealistic demands put on equipment suppliers.

"I think the biggest mistakes we’ve been making is just assuming that governments can get whatever they want, whenever they want it. It’s a real challenge to supply the market at the moment," Hart says.

"What we’re starting to see is more engagement of governments with the construction industry, so that they plan out their pipeline of projects better, but also that they procure them better. So it’s a more collaborative approach where risk is allocated effectively."


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