Skilled Labour Shortages:
The Australian Construction Industry has been faced with an ongoing challenge in acquiring a skilled labour force to adequately complete the responsibilities and requirements as professionals. The lack of essential knowledge of both the trade and safety requirements become high-risk factors on projects, as safe and quality are significantly affected. Because of this growing shortage, contractors are required to increase wages due to limited supply of qualified workers, as well as pay for additional training and development to improve unskilled workers and combat onsite safety concerns (Research Australia 2015). A factor contributing to this significant shortage stems from large amounts of qualified labourers working on larger commercial projects for a prolonged period, such as Barangaroo. This in turn has limited the supply of qualified workers to those small projects across Australia. To rectify this shortage, contractors have sought to offering increased wages and providing overseas sponsorships to qualified workers (Hunter 2017). Although sponsoring overseas labourers is beneficial, further issues may arise in relation to individuals adjusting and comply with the set rules and regulations in Australia. It can therefore be drawn that industry professionals are experiencing significant challenges attaining skilled workers to compliments their works in a safe and high-quality manner.
Sustainability Concerns:
The Australian Construction Industry is a major contributor to climate change, as the industries carbon emission has gradually increased from 1990 to 2012 (Hu 2015). The increased CO2 emission has placed a direct impact on the growing environmental concerns across Australia. The industry generated 25-40% of the worlds emission, this in turn placing a strain on construction professionals to better address sustainability concerns through reducing the level of pollution and waste (Leeds 2016). To address sustainability concerns across projects, it is advised to focus on those materials which are recyclable to improve landfill waste and help reduce waste produced by the industry (Ferguson 2017). Upon minimizing a projects carbon footprint, it will serve to provide an improved environmental state.
Safety on Site:
The Construction Industry is a high-risk area of work that requires constant examination of safety to address concerns. The Australian Construction Industry had a 22% labourer fatality rate accumulated in 2016 (Safe Work Australia 2016). Therefore, clearly indicating that the importance of safety onsite has a direct impact on the lives of workers. Accounting for 28% of fatalities in the Australian Construction Industry, falling from heights is seen as a major safety concern across all sites (Australian Training Institute 2017). These continuous trends reiterate that safety is a significant issue on site and is a major problem that needs to constantly be addressed. To further improve safety onsite, thorough safety initiations such as the White Card examination, clear site safety inductions and constant communication with workers to stress the importance of safety is advised.
Rising Project Cost:
The Australian Construction Industry is experiencing major issues, one of which includes the rising project cost. It has been forecasted that the industries costs are set to rise 9% by 2018 (Schlesinger 2016). As a result of these challenges, the construction industry has resort to the use of improved financial planning across all projects in order to reduce the loss of profits. A factor seen to be influencing this rise in project cost is the inability to hire skilled labour workers. This significant shortage of workers has forced the construction industry to increase wages due to market competitiveness, as well as pay for extra training to avoid safety risks. The construction industry has been the third largest employing industry in Australia since 2012 as well as contributing 7.7% of total goods and services in the Australian economy (ABS 2010). Despite the industries large involvement within the Australian economy, 70% of contractors currently experience ongoing problems with attaining qualified workers for major projects (Riddell 2016). Therefore, this shortage of workers has significantly contributed to the overall rise in project costs across the industry.
Another factor contributing to the rise in project cost is made evident through the rise in oil prices and the strength in the Australian dollar. Due to the Australian dollar being valued at $0.77 its strength is weak in comparison to the USD (FX Exchange Rate 2018), thus causing the importation of products to increase from overseas as it is valued less. This contributing factor have played a significant role in the issues of rising project costs, as imported goods are valued higher. The use of oil on projects for equipment function has increased the overall need for oil across most large-scale projects. The price of oil is approximately $63 per barrel, clearly identifying that this increase has a direct affected the rise project expenses (Market Index 2018). Further, the cost of materials such as fabricated steel and concrete blocks are estimated to increase by 2-3%. An increase of 6-7% in gypsum products is predicted to occur, in turn having a direct effect on materials that are commonly used on all construction sites, such as plasterboards (Cavalcante 2018). It can be gathered that the overall rise in construction materials has contributed to the problem of increased project cost. In order to improve this issue, construction companies are advised to reduce costs through the use of waffle pods and Hebel precast concrete panels as it minimizes the number of concrete blocks that are required on a project. These alternative methods provide for a quicker build with less materials, in turn reducing the financial burden of purchasing a higher quantity of materials.
Additionally, the overall increase in project costs across the construction industry can also be represented through the increased complexity of projects. Complex projects are seen to be of larger scale, which in turn directly impact the implementation period as it is stretch over a longer period of time (Buys 2015). Over this extended period, construction professionals are forced to plan and account for the effects of inflation and future variations in material pricing within the budgeted finances, as it will affect the cost and course of construction. It is suggested that all future changes in material price and inflation are projected, in order to avoid the risk of sudden cost increase and in turn project failure due to limited funding.
Therefore, the overall rise in project cost is viewed as a major problem within the construction industry, as it can occur effortlessly if suitable cost planning measures and alternate solutions are not adopted throughout the project. Construction professional are advised to adapted to these cost changes prior to and during construction through constantly monitoring and planning for variations that may arise in price and alter the course of the project.