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How Construction Contractors Can Pull Through Labour Shortages and Material Cost Increases in Australia

Daphne Khan

The construction industry faces labour shortages and sharp price rises for building supplies. For the past year, numerous contractors have reported an increase in supplier costs of up to 70%. Industry leaders worry that these issues will not end soon and will continue to affect construction operations across Victoria, Queensland, Western Australia, and New South Wales.

The Cause of The Problem in the Construction Industry

The onset of the pandemic affected the construction material supply chain, which led to raised lead time and material costs. It has caused severe delays and inconveniences to many infrastructure projects using construction project management software. Additionally, the conflict in Russia and Ukraine contributed to skyrocketing oil prices and the cost of materials.

With the predicted pipeline of projects for the next few years for construction software, workforce shortages and contractor availability will become more evident. It will also further drive demand and lead to higher construction prices.

As the world adjusts to the impact of the pandemic, several behavioural changes increased the demand for more significant dwellings. One example is the e-commerce boom that increased the need for data and fulfilment centres. These have also made additional labour in the industry a necessity that contractors must consider.

The increase of new workers in the construction industry is not as substantial as it was, even if the demand is high. After suspensions due to pandemic-related safety considerations, training programs have become hesitant to resume operations. The international labour force, considered a crucial source of talent and staffing for engineering, design, and contracting purposes, is becoming more challenging for the sector to draw in.

By improving overall productivity, contractors can pull through labour shortages and increased material costs. Strategies such as task elimination, reduction, redesign, or frequency reduction can benefit productivity. While implementing this method may take time to address the labour shortage, it can have a significant and long-lasting influence on productivity.

Infrastructure can be upgraded, replaced, and expanded over time due to the construction industry's work. When done effectively, addressing how construction contractors can pull through current labour shortages can lead to inclusive growth and contribute to success in the long run.

Daphne Khan
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