On June 07, 2024, Autodesk and Deloitte released a comprehensive report that sheds light on the significant trends, challenges, and opportunities faced by the construction industry across the Asia-Pacific region.
With a focus on the Australian construction sector, the findings provide valuable insights into the current state of digital adoption, the benefits of technological advancements, and the barriers hindering progress. Let’s dive into the five major takeaways from this report that every construction professional should know.
1. General Economic Challenges Impacting Growth
The Australian economy is predicted to grow by only 1.3% in 2024, indicating the weakest growth since the early 1990’s recession, excluding the pandemic period. This slow growth is accompanied by a decline in real household income per capita due to inflation spikes in 2022 and 2023.
2. Supply Chain Disruptions and Financial Performance
The Australian construction industry, employing over 1.3 million people, faces significant disruptions from supply chain issues, leading to material shortages and increased prices. Despite these challenges, businesses reported average revenues of AUD $142 million in FY23 and forecast a 10% revenue increase in the coming year.
3. Moderate Digital Adoption with Proven Benefits
Australian construction businesses utilise an average of 5.0 technologies, increasing to 6.1 for medium and large enterprises. Although they plan to implement fewer new technologies (4.3 on average) compared to other countries, nearly 80% of the technologies adopted have been successful, demonstrating significant benefits like improved productivity and utilisation rates.
4. Barriers to Technology Adoption
The primary barriers to adopting new technologies in the Australian construction industry are cost and skill gaps, exacerbated by high inflation and cost pressures within the supply chain. Despite these barriers, 76% of businesses report technical skill shortages, which is the lowest across Asia-Pacific, and only 23% have a defined technology strategy compared to 30% in the region.
5. Emerging Role of Artificial Intelligence (AI)
30% of Australian construction companies are currently trialling or using AI software to address labour shortages, high material costs, and supply chain disruptions. 61% percent believe AI will help reduce costs, and 33% plan to adopt AI in the future. AI is expected to become as prevalent as data analytics or mobile apps in the industry, emphasising the importance of data standardisation and having a common data environment for successful AI implementation.
These findings are not exactly surprising to the majority of us. Industry leaders are aware that embracing technology and overcoming barriers to digital adoption will be key to navigating the challenges and seizing the opportunities ahead. As the industry continues to adapt, these findings underscore the importance of innovation and strategic planning for future success.
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