Strong Growth Predicted for AU Commercial and Infrastructure Construction
While there's no doubt that many building companies have been affected by the downturn in the Australian residential housing market, most industry experts agree that exciting new opportunities are presenting themselves elsewhere. And contractors that are modernizing their operations to driver faster, higher-quality projects stand to benefit the most from the continued growth in commercial, civil and industrial construction spaces.
A Positive Construction Outlook Overall
A recent report by the Australian Construction Industry Forum(ACIF), for example, forecasts that that while residential building will continue to decline until 2020-21, this will be more than offset by a significant increase in non-residential projects.
This growth will largely be driven by private investments in accommodation, industrial and office projects, as well as public sector investments in education and defence. The ACIF believes this will continue well into 2020-21 and will raise activity to peak at $45 billion. As well as this, investments in infrastructure construction are also expected to return to strong growth due to the extension of current plans and programs, which will raise activity to as much as $66 billion in 2019-20 and $68 billion in 2020-21.
This positive industry outlook is supported by GlobalData which predicted that new commercial and industrial projects will increase the annual growth rate to 2.14 per cent from 2019 to 2023, compared with 1.59 per cent during 2014-2018. GlobalData construction analyst, Danny Richards, also believes this overall improvement will be largely driven by investments in infrastructure and points out that the government is planning to invest US$58.9 billion to develop Australia's transport networks.
Technology Giving Contractors a Competitive Edge
While the construction industry welcomes these positive indications, it's important to point out that competition will also remain strong. Success, of course, will rely on a company's ability to place timely, accurate and competitive bids.
But successful bidding is only the first step. Contractors will want to make sure that they can deliver their projects on time and avoid costly blowouts that can wreak havoc on their bottom lines. That can be a significant challenge if a contractor is tied to manual processes to collect data from the field, or are using multiple, disconnected software solutions to try and pull all the needed project information together.
Only through a consolidated construction solution can construction firms be confident that their bids are competitive — and also realistic. By integrating finances, project management, operations and business forecasting, a modern, construction-specific ERP solution combines every aspect of the project. Contractors have greater visibility on variables such as labour and changes in scope and have the tools for advanced forecasting that will allow them to quickly identify costs issues and take immediate and appropriate action.
A cloud-based, connected solution will add further advantages by eliminating the need for costly and time-consuming software installations and investments in specific IT infrastructure. Better still, all members of the project team — from the office through to the field along with owners, architects, subcontractors and vendors — will be connected to real-time data. This means closer collaboration, relevant and timely data shared instantly and streamlined workflows that will keep projects running smoothly. This means modern contractors can gain a significant competitive edge — from accurate planning and competitive bidding, right through to practical completion.
By embracing leading-edge technologies, contractors can land a greater share of new commercial and infrastructure projects, and make sure these new opportunities translate into new profits.