Supporting the Construction Industry

Australian Construction Industry Forum

In finding this ground, the organisation ensures ongoing, active communication between key players in the residential, non-residential building, and engineering construction sectors, other industry groups, and government agencies. Another key ACIF initiative is developing short and long-term forecasts that reliably predict future demand for building and construction across all sectors and locations. The organisation also supports the industry with a number of other resources, including policy and productivity tools, biannual ACIF Briefings, and a Directory of key organisations.

ACIF members are among Australia’s most significant construction industry associations and represent all aspects of building – from feasibility through design, cost planning, construction and building, and management. The organisation encourages and supports members in their efforts to provide leadership, create change within the industry, and increase productivity, efficiency, research and innovation.

The ACIF is led by a Board of Directors made up of the chief executives and senior management of its member associations, and employs a Secretariat whose job is to support the Board and the working groups in their efforts to develop policies and productivity tools.

Forecasts

ACIF forecasts serve as a vital source of information for the entire construction industry and provide all sectors and geographical areas with the unique insight needed for successful business planning. The rolling, ten year forecasts answer the gnawing questions that can make or break enterprises – from what kind of work there will be and where labour will be available, to how and when construction costs will increase. For instance, will business be booming, or should companies tighten their belts? Should builders expect new construction opportunities, or will renovations be the better bet? Will these opportunities be more plentiful in the retail and commercial sector, or is engineering construction the way to go?

The organisation’s forecasts are painstakingly produced by the Allen Consulting Group using data from a range of reputable sources including the Australian Bureau of Statistics and Deloitte Access Economics. This wealth of data is processed through the Shares Model after which project information from Cordell Information is applied. The final result is a series of comprehensive, and remarkably accurate, local and national forecasts across residential, non-residential and engineering construction.

Before a forecast is released, it is also subjected to the careful scrutiny of the Construction Forecasting Council (CFC). This review board is made up of leading economists, researchers, and analysts who “are also on a daily basis involved with what’s going on in the industry,” Mr Barda explains. “They do the reality check. They might have their own ideas about whether the forecasts are too optimistic, or not optimistic enough, or the timing is not right… And out of that process comes the final forecast.”

Forecast updates are released twice yearly at ACIF Briefings held in April and September. Summaries are also available online at no cost. The ACIF’s website even offers a “Build your own Forecasts” option which allows users to dig down into the data that affects them personally, providing insight into everything from upcoming local projects to the historical analysis of a particular neighbourhood.

Forecast 2013

“It varies enormously,” Mr Barda says of this year’s forecast. “We start by looking at three sectors – residential, non-residential and engineering construction. And the drivers for each of those are quite different.” Overall, however, “the fundamentals of the Australian economy are quite strong,” he reports. “And that is borne out by pretty much every forecaster you talk to, and certainly ours. We are in very good shape.” Mr Barda adds that, even though there will be a “moderation in growth, we still expect to see historically high levels of activity in the mining and gas sectors, which will drive other parts of the economy.”

The greatest challenge at present may be overcoming the collective apprehension still simmering in the wake of the GFC. “There is still this curious lack of confidence as, I think, people wait to see what will happen in Europe and the US, which means that the activity levels are not what they were five [or] six years ago,” Mr Barda points out. “[They] haven’t gotten back to those pre-GFC levels.” However, because “the fundamentals are strong, we are sure that things will turn back up… but it is still going to be probably at least another 12 or 18 months before we see a real return.” In a nutshell, the AFIC believes that the construction industry will be “flat and coming back to higher activity levels than we have seen over the last three years or so, but not the spectacular growth that we saw in the mid-2000s.”

Mr Barda warns that “there is no simple answer” regarding the specifics, however. “It depends on where you are, it depends on what sort of work you would like to do.” Residential work has been particularly impacted by the mining boom and subsequent population shift from Victoria and New South Wales to Queensland and Western Australia. Not surprisingly, the outlook for the latter two states is quite strong. Demographic changes arising from large scale baby boomer retirement is also an important factor. And, of course, the cost of purchasing a home remains a key driver. “With low interest rates we would expect to see quite strong growth [and] demand for new dwellings,” Mr Barda says. But, “that’s not happening uniformly around the country. It is all in different cycles.” Residential building in New South Wales has been depressed for a decade, but the region is slowly coming out of the slump with an expected $17 billion in new work this year and last. Victoria has reached the end of its residential building boom, and “will be flat for the foreseeable future.” As a general rule, apartment and townhouse projects will dominate the residential building market as high density living continues to grow in popularity.

As a whole, the outlook for non-residential building is poor this year. “With the GFC still lingering, and the European debt problem, and the Americans climbing out of recession, demand for new office space has really slowed to a trickle,” Mr Barda reports. And the boost delivered by the Building the Education Revolution (BER) is quickly evaporating as those projects reach completion. “Education has gone really flat after the Building the Education Revolution spending,” Mr Barda admits. “All those buildings are built.” Even areas that should be seeing growth are experiencing a slump. In Queensland, “we were expecting to see quite solid growth there, but with the uncertainty over mining all of a sudden the requirement for more office space has really shrunk and developers are sitting on their hands.” Sydney’s Barangaroo development is driving growth, but the city’s surrounding areas, along with Adelaide, Melbourne, and Perth, will all remain “pretty flat.”

Engineering construction has the brightest outlook of the three sectors being forecast. “If you are in central Queensland or north-western Australia, you’ve got a lot of mining work happening,” Mr Barda explains. “And there is huge work still being done. There is a slowdown in the number of new projects but there is still an awful lot of work in the pipeline.” The sector is expected to peak sometime next year after reaching $120 billion per annum. Initiatives such as the Carbon Price Mechanism, National Broadband Network and the Renewable Energy Target scheme ensure that engineering construction will continue to be the most productive industry sector for the next seven years, even as mining projects taper off.

Current forecasts also reveal a lack of available apprenticeships and a reduction in the demand for highly skilled labour in the future. The shift to unskilled labour is due to an increasing focus on regional engineering construction rather than on urban residential and non-residential projects. The drop in employment qualifications is a serious concern and may have long term impacts on the skills of the industry as whole.

A Strong Future

ACIF strives to develop “a successful, strong and sustainable construction industry in Australia.” To accomplish this goal, the organisation works to develop policy that is in the industry’s best interest, in addition to fostering communication and forecasting industry trends. “We have a pretty busy public policy agenda that we will be cranking up through 2013,” Mr Barda reports.

All of the policies that ACIF supports are backed with credible research and benefit the entire industry long-term. The organisation actively engages with politically influential individuals and groups to promote these policies and agendas. As a result, the residential, non-residential, and construction engineering sectors have a strong advocate and solid support, and the built environment and surrounding community are positively impacted.

From fostering communication to accurately predicting the future of the industry and pushing through key legislation, the ACIF has already accomplished a great deal. But Mr Barda insists that the organisation is always “trying to do more, always trying to expand the number of things we can do with data [and] provide the industry with information that helps them to plan or to figure out how to do things differently.” Indeed, the ACIF has provided years of invaluable support to the construction industry and is committed to staying abreast of construction needs, trends and related legislation in order to bolster the industry for many more years to come.

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

October 24, 2017, 5:51 AM AEDT

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2017-10-23 15:59