PlanGrid Construction Productivity Blog
Construction in Australia in New Zealand

Why Australia and New Zealand Are Losing $36.5 Billion Annually in Construction Labour Costs

Across the world, construction investment is growing. The great construction boom has been felt in nearly every corner of the world, including Australia and New Zealand. In fact, Australia’s construction output is expected to rise by a significant 7.1% in 2019. As the country’s population grows, New Zealand is also expected to experience solid growth in the building industry for the next coming years. Nevertheless, a major threat to this growth remains; industry-wide unproductiveness.

To better solve the construction productivity crisis, we wanted to understand the productivity gaps that exist in construction companies in Australia and New Zealand, how firms are investing in technology and why new solutions aren’t proving as effective as they could be. Partnering with FMI, a leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment, we surveyed construction firms across the two countries.

In our report, Construction Disconnected, we explore the link between productivity and technology at construction firms in Australia and New Zealand. The report is now available to download:

Download Now

We’ll also be hosting a webinar to discuss the finding of the report in greater details. Register here.

So, what did we learn about construction productivity in Australia and New Zealand? Read below to learn about some of the highlights from our report.

Time Is Not Being Spent in the Best Way

Beginning with productivity, the report found that 33% of construction professionals’ working hours are spent on non-optimal activities – those that take time away from actual building work. This includes:

  • Looking for project information (14%)
  • Conflict resolution (10%)
  • Dealing with mistakes and rework (9%)

The total time waste from these non-optimal activities amounts to $36.5 billion in labour costs across Australia and New Zealand, representing a significant drain on the industry’s performance.

FMI AU NZ 2

Data and Communication Challenges Are a Recurring Theme

Throughout Construction Disconnected, poor data and communication bubble up as common issue amongst construction firms. Construction companies in Australia and New Zealand reported spending more time than expected on tasks like:

  • Poor communication amongst project stakeholders (29%)
  • Lack of confidence in the accuracy of data (23%)
  • Lack of responsiveness in data delivery (18%)

 

Further Reading:  How to Make Paperless Construction a Reality [Webinar]

FMI AU NZ 2a

Similarly, the main causes for rework on projects are poor project data (30%) and poor communication (29%). These issues alone result in $8.4 billion in rework costs every year across the New Zealand and Australia.

Construction Firms in Australia and New Zealand Are Investing in Tech – But Is it in the Right Areas?

Construction companies in Australia and New Zealand are turning to technology to address core challenges. The main reasons behind investments are:

  • Improving project productivity (46%)
  • Getting better access to project data (36%)
  • Improving the accuracy of project data (34%)

Despite the valid reasons for investment, technology is still purchased to suit the needs of teams working in offices (54%) above those in the field (36%). Moreover, only 17% of firms considered receiving feedback from the potential users of new technology to evaluate its suitability before purchasing it.

The Gulf Between Technology and the Jobsite

Construction Disconnected highlights the disconnect that exists between the reasons behind technology purchases and how tools are selected, deployed and used in the field, which is underlined by the use of mobile devices.

While 44% of construction firms give mobile devices to managers on jobsites, only 8% actually use these tools consistently for accessing data and collaborating with other stakeholders.

By contrast, 92% use devices only intermittently, with one-third of project managers using their devices less than 20% of the time.

Where technology fails to meet construction businesses’ expectations, this comes down to it being a poor fit with existing work practices (39%), not matching existing technology (11%) and inadequate training (11%). Perhaps unsurprisingly, 6% of professionals also point to low adoption of tech.

A Golden Opportunity

Construction firms in Australia and New Zealand recognise the need to improve information-sharing and communication – and they’re turning to technology to do this. However, there remains a disconnect with users in the field, resulting in poor adoption and return on investment.

Today, there is an opportunity for firms to reconnect with managers on jobs, to deliver the technology that will actually meet their needs, reduce wasted time and significantly improve the performance of the business. Download our report to learn more:

Download Now

Further Reading:  100 Construction Industry Statistics To Improve Productivity

If you’re interested in hearing more about the findings of the report from experts, we will be hosting a webinar on December 4, 12PM AEST / 2PM NZST. Register today!

Adele Bernard

Adele Bernard (@Aadelebe) is APAC Marketing Director at Plangrid and has spent the last decade as an APAC Tech Road Warrior, presenting to leaders of enterprise organisations and organizing corporate events around the region.

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