Construction News Round-Up - March 2024

By Clea Boyd-Eedle, published 28 Mar 2024

How construction leaders are embracing digitisation to future proof their operations

ProcurePro held its inaugural first 5Ps Conferences this month, welcoming leading construction professionals to events in Melbourne, Sydney and Brisbane.

At the Melbourne 5Ps Conference, prominent construction figures Andrew Miller, Commercial Manager at Devco, Eko Oetomo, Commercial Manager at Kapitol Group, and Kasi Palaniappa, Chief Financial Officer at Cobild, sat down to discuss the current construction landscape, industry challenges, advice for other builders, and predictions for the future of construction in Australia.

Queensland premier Steven Miles rejects plan for multibillion-dollar Olympic stadium in Brisbane

Steven Miles, Queensland’s premier has rejected an independent recommendation to build a new $3.4 billion stadium ahead of the 2032 Olympics in Brisbane. The project was proposed by former Brisbane lord mayor, Graham Quirk who was commissioned to conduct a review by the QLD government.

Instead, Miles has endorsed using existing facilities Suncorp Stadium for the opening and closing ceremonies and the Queensland Sport and Athletics Centre (QSAC)for athletics. Miles stated his decision was due to the current financial struggles that Queenslanders are facing.

Experts call for increased monitoring and reduction of carbon emissions on major infrastructure projects

A recent report from Infrastructure Victoria has called on the government to implement a standardised measurement of carbon emissions across infrastructure projects. A dollar value per tonne approach is recommended to ensure the consistent and accurate measurement of carbon output of large-scale construction projects.

New South Wales has already developed a roadmap ‘to decarbonise infrastructure’ with a roadmap for implementing an output measurement system. Other countries like France and the Netherlands have introduced carbon emission output caps in infrastructure projects, highlighting Australia’s stagnation in addressing sustainability issues in large-scale construction.

Skilled migrants proposed as a potential solution to Australia's tradie shortage

BuildSkills Australia has estimated that at least 90,000 more construction workers are needed within the next three months in order to meet the Australian government’s target of building 1.2 million new homes by 2029. The goal was announced recently in response to the country’s worsening housing crisis.

Denita Wawn, CEO of Master Builders Australia, has stated that it would be ‘impossible’ to find this many construction workers not already in the workforce and has suggested migration as a solution. Wawn also stressed that current work permit barriers and tight permanent residency rules are dissuading skilled migrants from moving to Australia for construction work, and should be addressed to fulfil our overall building targets.

Scott Hutchinson says surplus demand is driving up costs, driving down profits in construction industry

Scott Hutchinson, Chairman of Hutchinson Builders, has shared that despite construction demand booming, profits are struggling due to inefficiencies and rising material costs. Hutchinson states that project costs have increased 30 to 40% within the last two years and that they are turning away 80% of work due to cost pressures and risk.

Chairman of The Consolidated Properties Group, Don O’Rorke has concurred this experience, sharing that his company ‘could not produce a two-bedroom apartment for less than a million dollars’. O'Rorke shared that four years ago, the same build would’ve only cost $450,000 to complete.

Confusion surrounding ban on engineered stone crippling building industry, say builders and suppliers

Builders and suppliers of engineered stone have been confused and without guidance following the Australian government’s ban on the material, which was announced in December last year. The ban is set to take effect on 1st July 2024, yet guidance on transition materials and best practice have still not been provided. This uncertainty is causing suppliers to lose business as they are unclear as to whether they can take customer orders, some which take months to fulfil.

State and territory work health and safety ministers are set to meet this month to discuss ‘transitional agreements’ for the ban, but have yet to provide dates on when this guidance will be available. Master Builders Australia CEO Denita Wawn has stated that all of this uncertainty could have been avoided ‘if governments followed best practice and announced transition and implementation arrangements’ when the ban was put forth.

Number of women in construction increasing - but more can be done

In light of International Women’s Day this month, Housing Industry Association’s Senior Executive Director, Compliance & Workplace Relations, Melissa Adler has shared insights into the current landscape and future improvements for women working in construction. The number of female workers undertaking training in the construction industry has doubled since 2019, and this figure is set to grow.

Adler posits that increasing female participation in the construction workforce could mitigate the shortage of construction workers needed to fulfil the government’s target of building 1.2 million homes by 2029.

Westpac’s New Zealand March 2024 residential construction update released

Westpac’s recent Economic Bulletin has been released, focusing on the state of New Zealand’s residential construction sector. The report states that 125,000 more homes are needed within the next five years to meet population growth requirements, despite a downturn in overall construction activity.

The update has also found that many developers in New Zealand are still very cautious about taking on new projects, due to persistent high interest rates and weak high price growth. Net migration is also expected to fall, calling into question where skilled construction labour will be found to meet current housing targets.

United Kingdom Construction News

UK construction sector stabilises as housebuilding slump ends

A recent assessment on the UK economy, in light of the Spring budget, has found that demand for construction has improved, with new project orders picking up pace. A poll of UK purchasing managers found that total activity fell fractionally, new work has risen for the first time since July 2023 and forecast optimism is at its highest since January 2022.

Hopes of interest rate cuts later in the year are believed to be behind the industry’s stabilisation and overall change in outlook. The UK housebuilding sector has had the strongest turnaround, however commercial contractors are still experiencing a hesitant and subdued landscape.

Understanding the Spring Budget 2024 - and what it means for UK construction

The UK’s Spring Budget for 2024 was recently released, with a focus on tax cuts in light of the upcoming election serving as the basis of the budget. A number of proposals within the budget relevant to the construction sector were presented, including a reduction to the higher rate of property capital gains tax, an increase in day-to-day public spending above inflation, allowing full expensing, increasing the VAT registration threshold and a goal of keeping inflation below the target of 2% within a few months.

Construction industry leaders have responded to the budget, including Robbie Blackhurst, founder of Black Capital Group, who called the budget ‘average for the Built Environment sector’. Blackhurst stated that the budget was void of detail required to achieve the goals.

Other experts, like Dave Dargan, co-founder and CEO of Starship, noted the significant lack of focus on sustainability and the roadmap for achieving net zero carbon emissions. Dargan highlighted lack of available property as the significant barrier for people to get on to the property ladder, proposing ‘modular housing’ and ‘green construction methods’ as stronger solutions than the budget has proposed.

Administration Committee hears how Parliament is supporting women in construction roles on the estate

During Women in Construction week earlier this month, The House of Commons Administration Committee ran a one-off public evidence session on women in construction, focusing on current and future projects on parliamentary estates. Women working across parliamentary construction projects shared their experiences with the committee, in light of a major Restoration and Renewal programme happening across UK heritage sites.

The session found that increasing numbers of women are occupying specialist construction roles and that women account for more than 60% of board positions in Strategic Estates, well above the UK industry standard.

Ireland Government’s 2024 homebuilding target ‘at risk’

Residential construction activity contracted for the 17th month in a row in February, risking the government’s targeting of building 33,450 homes in 2024. This is despite a rapid growth in home project completions in 2023, where the government exceeded its yearly target by 13%.

Experts suggest that the main factors impacting new commencements figures are a focus on completions rather than commencements, as well as continued uncertainty surrounding economic outlook and construction costs.