Despite growing concern around the industry and the collapse of multiple construction businesses across Australia, eight in ten senior business leaders in construction surveyed, agree that the construction industry in Australia is stable.

The inaugural Kennards Hire Construction Confidence Check suggests that senior business leaders in the construction sector surveyed are most likely to say that the rising cost of materials (47%), supply chain issues (46%) and skilled labour (42%) are the biggest causes of concern that could impact the stability of the construction industry today.

Other common challenges reported causing issues are poor productivity from delays due to weather, breakdown of equipment and late deliveries of materials (36%).

However, on the positive side, 82% of senior business leaders surveyed in the construction sector say that their business is now more financially responsible and prepared for unexpected costs in their business as a result of the events of the past two years including the COVID-19 pandemic, bushfires, floods and droughts, with 44% saying their business is a lot more financially responsible.

Victorian and New South Wales construction leaders surveyed were most confident the construction industry in Australia is well-placed to withstand pressures on the sector and will continue to grow.

Nationally, infrastructure (27%), residential property (23%) and commercial property (17%) are the industries most likely to be seen by those surveyed as driving stability and growth in the construction sector over the next five years.

“Despite the number of construction companies reported to be folding, our research shows business leaders in the construction industry show a remarkable amount of confidence in the sector,” Kennards Hire general manager commercial Tony Symons says.

“Supply chain issues however remain a pain point for many at the bigger end of town impacting the ability to deliver projects on time and on budget. With the profit margins, these companies operate on and the rising focus on sustainability the rental market can assist in managing costs and positively contributing to the circular economy.”

Digital skills in construction

The vast majority (96%) of senior business leaders in the construction sector surveyed believe that digital skills will be important to optimise business operations in the construction sector with leaders suggesting digital design & visualisation (45%), data analytics (40%) and digital marketing (37%) will be most important to optimise business performance.

Other digital skills senior managers think will be important to optimise business performance include social media (35%), digital business analysis (35%), cybersecurity (27%) artificial intelligence (25%) and the Internet of Things (20%).

Those working in larger organisations with 100-plus employees are more likely than those working in smaller organisations of 20-99 employees to say that data analytics (50% compared to 32%) and artificial intelligence (36% compared to 17%) will be the most important to optimise business operations in the construction sector.