As many as one-third of Australia’s construction businesses could be forced to close over the next twelve months if business conditions do not improve, the latest survey suggests.
But technology solutions are set to help businesses manage through the process by reducing risk, improving productivity and reducing the need for on-site inventory.
Construction management software provider Procore has released the first findings of its How We Build Now – Tracking Technology in Construction 2020 report for which research was conducted by ACA Research.
The report – based on a survey of 260 building firms across Australia during February and a follow up survey of 152 firms in April – showed that COVID 19 had hit the industry hard.
In the February survey, 69 percent of all companies who responded were confident about industry prospects and business conditions for the year ahead.
By the time of the April survey, this had fallen to just 43 percent with confidence among small builders with fewer than ten employees now as low as 30 percent.
Moreover, one-third of those surveyed (33 percent) indicated that they will consider closing their doors over the next twelve months if business did not improve.
In other survey results, across all firms surveyed:
- The number of construction projects is expected to drop by 34 percent whilst the value of those projects is expected to decline by 33 percent.
- In commercial and industrial projects, the value of projects is expected to drop by 19 percent.
- Almost one in four (22 percent) small construction firms are cutting wages to the minimum JobKeeper allowance.
- More than half (55 percent) of all large construction firms are reducing business owner/senior executive remuneration in response to COVID-19.
- 41 percent of all firms are using fewer subcontractors on site.
To manage this, meanwhile, builders are turning to technology.
Across survey respondents, almost four in ten (39 percent) say they will use the quieter period to update technologies, systems and processes.
Meanwhile, 48 percent of all respondents say they are using technology to manage risk on site whilst 38 percent are using technology to improve productivity and 30 percent are using technology to reduce the volume of materials which need to be held on site.
Tom Karemacher, Vice President APAC at Procore Technologies commended the industry for its adaptability.
“Whilst this pandemic has brought significant challenges to Australian construction, it is a resilient industry that has weathered its share of economic downturns,” Karemacher said.
“I’m so impressed with the camaraderie we are seeing in the industry, and how quickly companies have pivoted to make the most of technology to support their businesses.”
Dean Willemsen, Managing Director at Prime Build, broadly agrees.
“With the shift in working conditions, we have undergone a significant change management exercise, and now have the opportunity to think about how we can better leverage the people, processes and technology we’ve got more effectively,” he said.
“What we do now will define our businesses in the future.”
The report will be launched in a virtual event on Thursday, June 4th.