Some of the challenges the construction industry is facing right now include, Bad Cash Flow & Reduced Workplace Productivity to name but a few.
Challenges Facing the Construction Industry
Undercapitalisation — Working capital is critical to achieve success. Do not underestimate the capital needed to pursue the most profitable projects and have the cash necessary to fund those projects until progress payments can be obtained. Many bad decisions are made while companies are in panic mode due to cash-flow being tight.
Bad Cash Flow — we all know that being paid on time gets harder and harder all the time. Understanding of how each particular client pays is critical to maintaining a positive cash flow into your business. Poor paying clients have caused many problems for companies in the construction industry. The tip here is to always ensure you stay on top of your cash flow and payment dates.
Inadequate Planning — Understanding your manpower and cash issues can determine the success or failure of any project. Do not overestimate your capabilities to perform a job or underestimate your cash flow to adequately pay wages, suppliers, etc. Map out the details of all of the project’s stages and what you are assuming could happen in the near future. Know who you are and know that your company can meet its obligations.
Inflexibility — continually review your plan versus reality and be willing to make changes when you see your plan is failing or at risk. Have a willingness to track and make changes to the plan and learn as you go and then apply this knowledge to future projects.
Uncontrolled Growth — one of the biggest downfalls to any organisation is loosing sight of who you are, who works for you, and what all of your capabilities are. Set realistic goals and allow your company to grow at the same rate as your capabilities.
Reduced Workplace Productivity – studies have shown that average work hours either remain the same or decrease. This is one big problem that the Australia construction sector is failing to handle.
Safety On Site – another problem that the Australian construction sector is encountering is safety on site. There are significant costs associated with claims against insurance for compensation for serious injuries. Since the industry is spending more on insurance and compensation, there will not be enough funds to boost productivity.
Skilled Labour Shortages – skilled labour shortages should not be underestimated when talking about the problems facing the Australia construction industry. Our country is unable to produce enough skilled professionals who have the ability and knowledge to handle the job.