Infrastructure Australia’s 2024 Market Capacity report finds that ‘businesses continue to report pipeline uncertainty as one of the biggest risks to project delivery. Notwithstanding the widespread construction workforce shortages at the national aggregate level, delays or uncertainty at the project level may disincentivise businesses from investing in longer-term workforce capacity building.’ 🔗 Read our media release: https://lnkd.in/gGvCc3f8 🔗Read the report here: https://lnkd.in/gEAvMfPi Jonathan Cartledge, Chief Executive of Consult Australia, says: “The report’s findings will come as no surprise to the industry. Businesses are grappling with a challenging environment where changes to previously committed projects are forcing firms to restructure and make redundancies. This volatility is particularly alarming in areas where we already face long-term skills and capability gaps, such as engineering and professional services." Consult Australia welcomes IA’s focus on recommendations to improve construction productivity highlighting ‘the need for a better balance of risk allocation in contracts with factors including overly complex and litigious contract models, [and] governments’ overly low risk appetite.’ To that end Consult Australia looks forward to working across government to support the delivery of reform through the National Construction Strategy, supporting the delivery of Model Client behaviors, Digital by Default approaches and cultural reform to attract and retain the workforce we need. With these commitments realised in real reform we are confident that we can support the delivery of the infrastructure Australia needs for the next generation.
Short-term pipeline uncertainty undermines long-term infrastructure delivery. The release of Infrastructure Australia’s Infrastructure Market Capacity 2024 Report today highlights the urgent need for greater certainty and confidence to support Australia’s $213 billion five-year pipeline of major public infrastructure. Consult Australia welcomes the report’s insights while raising concerns about the short-term volatility in the infrastructure pipeline, which continues to undermine business confidence, investment and workforce planning. The report’s findings will come as no surprise to the industry. Businesses are grappling with a challenging environment where changes to previously committed projects are forcing firms to restructure and make redundancies. This volatility is particularly alarming in areas where we already face long-term skills and capability gaps, such as engineering and professional services. Now in its fourth year, the Infrastructure Market Capacity 2024 Report shows an 8% decline in the value of previously committed projects compared with projections from the same period last year. Transport infrastructure remains the largest expenditure category, accounting for 59% of the major public infrastructure pipeline, but with a significant $32 billion reduction compared to the previous year’s forecast. The reduction in transport infrastructure investment, particularly in Victoria and New South Wales, is creating a ‘two-speed economy,’ with regional areas and northern Australia seeing greater growth while metropolitan areas bear the brunt of project delays and cost changes Infrastructure Australia’s report notes that these delays and project reviews have shifted projected investment peaks further into the future. While the report suggests the market may be struggling to deliver an overly ambitious pipeline, the issue lies with governments’ inability to deliver confidence and certainty. Businesses need pipeline continuity to invest in capability, skills and workforce development. Without it, we risk further undermining Australia’s long-term capacity to deliver the infrastructure we need. The report also underscores the critical importance of improving construction productivity, pointing to the need for better risk allocation in contracts and a more collaborative approach to project delivery. We welcome Infrastructure Australia’s focus on construction productivity and look forward to working across government to support reforms through the National Construction Strategy. By adopting Model Client behaviours, Digital by Default approaches and cultural reform, we can attract and retain the skills required to deliver Australia’s next generation of infrastructure. 🔗 Read our Media Release here: https://lnkd.in/gMUYe5F4 🔗 Read the report here: https://lnkd.in/gdVAU_sg