Good time to be a project owner but construction sector ‘skills gap’ may lie ahead.
Australia and New Zealand construction experience has given local construction project owners maturity and sophistication enabling them to better compete in the global marketplace.
That’s very positive news.
We have some of the world’s best project systems and governance approaches and the current market conditions are bright. In addition, considerable experience has been gained in the last five years in energy and natural resources projects and now there are world’s best practice construction professionals and contractors available in the Australian marketplace.
While the last two years in particular has seen an overall decline in productivity in the construction sector, at the same time, the industry has ‘stepped up’ to increase capacity and capability.
The results of the KPMG Climbing the Curve Perspective Report, a breakout from the KPMG Global Construction Survey 2015, illustrate these trends with more than half of the respondents saying that 90 percent of projects came in on budget compared with 31 percent globally.
What’s more, there’s a strong pipeline of infrastructure projects expected to commence in about 12 months from now – many of them in New South Wales as part of the $591 million in infrastructure funding announced this week by the Baird Government.
Australian project owners have also become very good at managing project risk. That’s going to be even more important in the coming 12 – 24 months as new projects ramp up. In particular, human resources will be a major success factor.
But with the resources downturn, and lower productivity rates in the sector, there is talk in the market about a potential skills gap.
This is a risk area that should be considered now, not in a year’s time. The major construction projects will need qualified and experienced engineers and project managers, skilled people who have the necessary background and sophistication. In addition to sourcing the right talent, it must be effectively managed throughout a project.
Australia will have to cast its net wider to ensure talent if it can’t find the right people here and also make sure that talent is deployed in the big future projects and that positive contractor relationships are maintained via creation of integrated project teams.
Our construction industry is world class in its risk management, planning and execution. It is a sector that can deliver five times the value for every dollar spent. Yet thought needs to be given to how we can ensure Australia has a pool of world’s best construction professionals as the demand curve for projects swings upward.