Construction News Round-Up - January 2024

By Clea Boyd-Eedle, published 23 Jan 2024

Australian Constructors Association (ACA) proposes a National Construction Strategy

Amidst a number of challenges for the construction sector in 2023, the Australian Constructors Association (ACA) has put forward a proposal to the government to mitigate future risk and impact on the industry. The ACA posits that the Australian construction industry is currently operating on outdated systems, with a short-term focus that doesn’t consider future innovation as a priority. The proposal states the need for the development of a 10-year National Construction Strategy, “a comprehensive national approach to construction productivity reform”.

The ACA outlines three key elements that are to be addressed in the strategy, including the development of national procurement standards and standardised contracts, stronger data tracking and the overall utilisation of analytics, and a framework to address skill shortages by proactively up-skilling existing workers to meet ever-changing demands.

Booming Western Australia offers £6,000 to woo British workers

A £5.8m (A$11m) visa subsidy scheme has been introduced by the Australian government to entice British and Irish construction workers to move to Western Australia to work on a number of large-scale government projects in the state. The Australian government is looking for workers across a number of diverse trades, including Civil Engineers, Structural Engineers, Plumbers, and Carpenters.

British and Irish workers who participate in the Construction Visa Subsidy Programme will be given up to £6,000 to help cover the costs of application and relocation.

Digital skills deficit hampers Australia’s construction sector progress

Deloitte and Autodesk’s 2023 report, the ‘State of Digital Adoption in Construction’, has found that an industry-wide lack of digital skills is hampering the sector’s capabilities for growth and development. Globally, the construction industry has one of the lowest rates of digital adoption.

Although more and more Contech solutions are entering the market, effective adoption is being impacted by an ageing workforce and lack of technical training for workers. A reported 41% of construction companies are experiencing uncertainty “about the skills and capabilities required to implement technology solutions”.

Despite this, construction companies remain optimistic about the application and importance of technology within the industry. In the State of Digital Adoption in Construction report, 89% of construction companies surveyed stated they’d purchased new technology during the 2022 financial year.

Australia’s housing targets at risk as building stalls at decade-low pace

The Australian Government’s target of building 1.2 million new homes within the next 5 years is looking incredibly unlikely as the cost of building new homes continues to rise. High costs of essential materials, land prices, interest rates, and a shortage of labour are all key drivers for unrelenting cost increases and are dissuading builders from undertaking new build projects. Scott Hutchinson, founder of Hutchinson Builders, stated “it hasn’t been like this in my working lifetime, and I’m 64”, expressing the severity of the industry’s situation.

Jardon economist Carlos Cacho reiterated the goal’s unlikely achievement, predicting only 155,000 new homes to begin construction, the lowest figure since 2012. Mr Cacho cited a 30 per cent increase in construction costs and a 30 per cent decrease in buyer capacity, making new residential builds unattractive for both builders and buyers.

Increase to cost of building new homes in New Zealand at seven-year low

Data from CoreLogic has found that the cost growth of building residential homes in New Zealand has fallen to 2.4 percent, the lowest rate since 2016. Despite an increase in costs of imported products, supply chain constraints have eased and the cost of many products used in residential construction have fallen.

Thanks to this stabilisation, the pressure on the country’s residential construction sector has eased but builders are still being kept busy with projects. Despite this, residential construction starts are expected to subdue, with costs of new builds remaining high relative to average salaries.

United Kingdom Construction News

Construction recovery in the UK a tough task, says analyst

Rebecca Larkin, Head of Construction Research at the Construction Products Association (CPA) has predicted that the sector will face a tough recovery after a difficult year in 2023, even with plateauing interest rates. Despite stabilisation, rates are currently at all-time highs, making financing for large-scale projects highly unappealing. There are also thousands of schools built with aerated concrete (RAAC) that require immediate mediation and funding for new-build schools and hospitals will likely be diverted to these efforts.

With overall weak economic conditions in the UK, there is “very limited momentum” for construction growth before the second half of 2024. However, the CPA forecasts a growth of 1.8 per cent in 2025 as the economy is expected to stabilise, with larger projects becoming less of a risk to developers. It is also predicted that post-Grenfell building legislation, the parameters of which are not yet fully defined, could also slow down recovery.

Why construction technology holds the key to tackling £21bn lost to error in the UK

Cliff Smith, Executive Director of the Get It Right Initiative, has positioned technology as a key solution to addressing the mammoth cost of errors in the construction industry. An estimated £21bn is lost every year due repeating design work, wasting materials, and having to re-complete tasks. Get It Right believes that the implementation of software, such as checking technology, communication tools and document management systems, can vastly reduce the incidence of errors during a project’s lifetime.

While the technology is available, Smith stresses the need for a complete mindset shift within the construction industry to embrace Contech. Adequate and regular training is highlighted as a solution to dealing with skills gaps and to increase adoption.

10 UK-based construction projects to watch in 2024

Keith Cooper, key contributor at Construction News, has revealed his predictions of the 10 most interesting and impactful construction projects in the UK in 2024. Here are some of our favourites:

The restoration of the Palace of Westminster, a project that is critical to ensuring the Houses of Parliament stay ‘upright’ and has had costs blow-out due to ongoing procrastination. The project is now valued at £13bn, up from £3.5bn in 2015, with an additional £750m worth of renovations that is being prioritised.
The Thames Tideway super-sewer will begin its testing phase, expecting to divert 95% of London’s sewerage overflows from going into the Thames. The project is predicted to cost £4.5bn, within initial expectations.
UK schools will be a key focus in 2024, with an £11.4bn repairs backlog and thousands of schools also being impacted by the RAAC crisis. As aeroated concrete (RAAC) is found in more and more schools, the UK Government has been unable to give an estimate on the expected costs of mediation.
UK road projects are expected to move away from smart motorways, deemed overambitious and too costly, in favour of urgent repairs of ageing motorways to ease congestion and safety challenges.
Everton Stadium, the new home of Everton FC, is expected to complete construction in 2024. However, there are serious concerns around this date being met, as the Premier League Club faces significant financial difficulties and is hoping for a planned takeover by a US investment firm.
1 Undershaft, a 73-storey tower set to become the tallest in London, is currently being planned and is expected to submit for approval later in 2024. Contractors keen on undertaking this mammoth of a build are being asked to submit interest to client Aroland Holdings this year.
Google’s HQ in King’s Cross, worth £1bn, is due to be completed by head contractor LendLease this year. The building spans one million square feet and fits 4,000 staff, with retail units, a market hall, and event spaces within the ‘groundscaper’ complex.