ANZ’s construction industry faces productivity challenges, but opportunities for improvement lie within reach

Australia and New Zealand are facing a huge boom in construction. Australia’s construction output is expected to rise in 2019 by an impressive 7.1%, and New Zealand should also see an upward trajectory in building projects as its population grows. Despite these optimistic forecasts, the construction industry in both countries remains plagued with challenges of a labour shortage and systemic inefficiency.Australia and New Zealand are facing a huge boom in construction. Australia’s construction output is expected to rise in 2019 by an impressive 7.1%, and New Zealand should also see an upward trajectory in building projects as its population grows. Despite these optimistic forecasts, the construction industry in both countries remains plagued with challenges of a labour shortage and systemic inefficiency.

While labour unions and trade institutions are working overtime to train more apprentices in an effort to alleviate the skilled labour shortage, the inefficiencies in building practices require an understanding of why these problems exist before real solutions can be proposed.

To better understand why these inefficiencies keep occuring–PlanGrid, a provider of construction productivity software, and FMI, a leading management consulting and investment banking firm dedicated to engineering, construction and infrastructure, surveyed construction firms across Australia and New Zealand.

The findings were revealing, if not surprising: first, time is being misspent in several key areas, taking away from the process of actually building. Second, the survey results also exposed a significant disconnect between the people responsible for making technology purchasing decisions in a construction company and those required to actually use the technology in the building process.

Let’s dive in.

The survey found that 33% of construction professionals’ working hours are spent on “non-optimal” activities – those that take time away from building. The most time-consuming “non-optimal” activities include:

  • Looking for project information (4.9 hours)
  • Conflict resolution (3.4 hours)
  • Dealing with mistakes and rework (3.2 hours)

Collectively, this time represents almost a day and a half of working hours that don’t directly benefit the overall construction project. This wasted time amounts to $36.5 billion in labour costs across Australia and New Zealand, a huge expense for the industry to absorb at a time when it needs to be operating as productively as possible.

In addition to these wasted hours, construction firms’ productivity is also being hindered by poor data and communication. Ever try to call a coworker when a piece of information is urgently needed, only to find them unavailable? You’re not alone. According to survey respondents, the most common reasons for tasks taking longer than expected are:

  • Poor communication between stakeholders (29 percent)
  • Lack of confidence in data accuracy (23 percent)
  • Delays in receiving information (18 percent)

These issues alone result in $8.4 billion in rework costs – some would argue avoidable rework costs – every year across the ANZ region.

With that, many construction firms are turning to technology to help solve these challenges. However, they are undergoing the purchasing process without concern for those who are most impacted by the inefficiencies on a construction project – field workers.

Based on survey responses, technology is purchased mainly to suit the needs of the office (54%) rather than those in the field (36%). Not surprisingly given these stats, only 17% of firms considered gathering feedback from potential users of solutions before making the purchase.

The problem with this approach is that the technology purchased is then failing to meet the expectations of a construction business. Respondents shared that when these expectations aren’t met, it is primarily because of:

  • Poor fit with existing work practices (39%)
  • Not matching existing technology (11%)
  • Inadequate training (11%)

It would be a mistake to omit the role of mobile devices in this exploration, particularly given the importance of mobile technology – smartphones and tablets – in daily communication (both on and off the jobsite). According to survey results, only 44% of construction firms give mobile devices to managers, and even more surprisingly, only 8% actually use these devices consistently for accessing data and collaborating with other stakeholders.

Within the context of these findings, it is apparent the ANZ construction industry has reached a turning point. Firms are recognising the need to enable better communication and access to project information for their entire team. However, many are off to a rocky start and there is a real need to improve the disconnect between technology users in the field and those making the purchasing decision. With the input of field workers, firms are likely to see expectations around technology better met and adoption rates to increase. In turn, the region’s construction industry has an enormous opportunity to decrease wasted time, significantly improve performance and build more efficiently.

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