What is the future of the construction industry in Australia in 2022?

The Australian economy has undergone significant changes in the past two years. This can primarily be attributed to the COVID-19 pandemic which has ebbed and flowed over this period of time. Some industries have flourished, while others have struggled to adapt in the wake of this pandemic. 


One industry that has certainly had its troubles is the construction industry. As physical labor is a large part of building and construction, many projects have needed to be put on hold or pushed to later dates to accommodate lockdowns and restrictions. Considering the construction industry is one of the largest in Australia, this has put a dent on the economy.


The Construction industry deals with the construction, demolition, renovation, maintenance or repair of building and infrastructure. It is an expansive industry, covering a large range of services, from procurement to social infrastructure to post-construction services. generating over $360 billion in revenue and producing around 9% of Australia’s GDP, the construction industry is one of the largest in the country. This is further evidenced by the fact that it has a projected annual growth rate of 2.4% in the next five years.


2021 was an improvement on 2020, but there were periods in which construction stagnated. What could be taken from this year is that slowly but surely the industry was beginning to pick itself up from the ground. 


However, things are starting to improve. 2022 has begun, and prospects are looking much more positive. The key for the construction industry’s success is backing by state and federal governments to produce public projects that seek to improve the quality of life in Australia. We have already seen recently that economic and social infrastructure is a huge topic for the federal and state governments. The question is, what does the future entail for the Australian construction industry in 2022?



Flexible working arrangements


One of the biggest changes to how construction operates in Australia is how work is conducted. As mentioned earlier, the building and construction industry is reliant on physicality. What is built requires manual labor, and therefore more than one person could be working on something at any given time. 


Despite this, the pandemic has changed things. Social distancing was not even a concept a few years ago, but has now become a requirement in most environments, including work. For an industry so reliant on the physical aspect, the challenge to working around this has been puzzling for many. How do you incorporate more labor whilst complying with social distancing?


What we may see is less staffed workers at particular times of the day. This may hamper schedules, prolonging projects to longer end dates, however it is a significant upgrade to previous instances where projects were previously shelved or kept for later dates of completion. As long as projects are coming, the construction industry shouldn’t have too much trouble working around arrangements of employment. 


One of the reasons why there shouldn’t be too many difficulties is because there has been a skilled shortage of labor in construction for many years. Demand is high while supply is low, so unemployment levels from construction will not necessarily have a big impact on the economy. 


But while there is less supply of jobs, employment is expected to increase in 2022. The numbers started to fall over a two year period during covid, however there should be a rise over the coming year.



Increased regulations


The construction industry was already one of the most regulated industries in the country. It will most probably see more regulations in the coming year. With the need for skilled workers comes greater quality and safety. 


Projects require the right people with thoroughly honed expertise and skill who understand the requirements for a project to be sufficient and satisfactory for public or private use. Regulations can be in relation to many things. 


For instance, how many people can be on a construction site at any given time, or certain requirements that different types of construction have to be deemed fit for purpose. 


The pandemic has only increased this need for regulations. Although it may seem stringent, it is one of the keys to ensuring more projects are greenlit over the coming year.



Increased public investment


With all that has occurred over the last few years, we can expect the government to fund many infrastructure projects. By getting a boost from the construction industry, the economy will start to make strides. The federal budget has undergone significant changes in the last two years. With stagnation in economic growth, some industries have taken a backseat to others. Australia relies on construction, and throughout the pandemic has attempted to avoid completely shutting down projects, instead encouraging delays and less people on the job. 


The trend that will develop is the government investing significantly to ensure many construction projects can begin this year. The goal is to create more jobs and come out of a minor recession, and the best way to do that is to create a big build boom.



Focus on population growth


For a long time, Australia has relied on population growth to help fill voids in areas lacking in employment, particularly where skilled labor is limited. Construction struggles in this aspect, which has been further hampered by the pandemic. Lockdowns have prevented mass immigration to Australia for foreign workers, and the industry has been unable to fulfill those gaps. As restrictions ease, the government will be focusing on encouraging more people to move to Australia to reduce the unemployment level, especially for building and construction. 



Reduction in shortages for natural and material resources


With so many variants of COVID, we have seen increased delays in resources. Numerous industries have been affected, which has meant that supply of goods have decreased and demand is too high, therefore they cannot meet each other at an appropriate level. With cases of the virus falling and restrictions reducing, we should eventually see these shortages fall over time. It will not be quick however. Time is needed to reset processes and return to optimal levels of operation. But at some point this year the drop will begin to occur.



More technology


We live in a digital age. Everything is beginning to incorporate tech, and construction is no different. Despite needing physical movement, more tech is being introduced into the industry to save costs and time. The pandemic has forced us to find ways to become more efficient. If more workers cannot be present on worksites at any given time due to social distancing and health requirements, how do we counteract this?


Tech is the answer to this. Bringing in new tech to replace machinery and hardware will aid construction in meeting demand and ensuring economic efficiency and productivity, which will only seek to increase economic growth. 


As the construction industry is one of the largest in Australia, it is extremely important that it finds success in 2022. Whilst the last two years have been difficult, the apparent stagnation appears to be waning. These trends are the forecast for 2022, and with these introductions we can expect big changes for the industry, which we hope will be fruitful and positive. 


Parker Brent is an accredited provider of building and construction courses, specializing in the Certificate IV in Building and Construction (Building) and the Diploma of Building and Construction (Building). If you are interested, enquire here today.