Newsroom NZ’s Post

The construction industry is a critical part of global economic growth, but it also faces a unique set of challenges. From labor shortages to rising material costs, these obstacles can delay projects and drive up expenses. To remain competitive, construction companies must adapt to an ever-evolving landscape while finding innovative solutions to these pressing issues. In this blog, we’ll dive into the key challenges facing the construction industry today and explore how companies can overcome them.

What happens when you put pen to paper and sense check global construction ambitions against workforce capacity? Turns out that our global construction targets over the coming decades eclipse the expected steady state labor capacity. The solution is increasing productivity and the imperative is now 🏗 Link below for the latest McKinsey thinking on construction productivity Grateful to have taken part in this article Link: https://lnkd.in/dMEqA83h

Willingness and open-mindedness to accept the challenge and adapt to the built environment program is essential in achieving the goal. Likewise, putting in extra time and effort to collaborate and making things happen towards achieving productivity and innovation. You have nothing to lose but only things to learn and ideas to gain. #construction #productivity #innovation #ppvc #builtEnvironment

Construction sector productivity flat since 1985 A new report highlights widespread productivity challenges in the construction sector, underlining the urgency of the government’s plan to make it easier and more affordable to build, Building and Construction Minister Chris Penk says.    “The New Zealand Chinese Building Industry Association have released a report investigating the building and construction sector and outlining the opportunities and challenges of one of New Zealand’s most important sectors.    “The construction sector is a crucial part of the economy. The report found that the sector contributed $99 billion dollars in sales in 2023 and indirectly supports over half a million or 20% of all jobs in New Zealand.    “However, the report paints a grim picture of the sector and points to a number of issues, including the fact that productivity levels have remained the same since 1985.   “Another key challenge is the slow and inefficient build process, which leads to longer wait times and higher costs. Worryingly, the report found that the time it takes to build a home has increased by 50% from 13 months to 19 months.   “These factors combine to create an unaffordable housing market which forces Kiwi families to spend more and more of their income on housing. It is unacceptable that renters now spend nearly 40% of their income on housing.    “This is reflected in the report which asked industry participants to describe the construction sector with one word, with the most common response being ‘expensive’. This is exactly why the government is focused on streamlining the building consent system and removing unjustifiable red tape that is slowing down the build process.   “Lifting productivity in the sector will not happen overnight but it is vital to build more homes so more Kiwi families can benefit from having a stable home and all the associated social and health benefits. “In the last six months the government has already progressed a raft of changes to address some of the issues raised in the report, including: 🔸 Removing barriers for overseas building products. 🔹 Progressing work to make remote inspections the default approach which offers significant productivity gains over traditional methods of inspections.  🔸 Making it easier for minor changes to be made to a building consent to remove the need for an additional application to be lodged for small changes. 🔹 Amending regulations so that smaller dams are not subject to excessive compliance costs.  🔸 Reviewing the earthquake-prone building system to better balance safety with cost and risk.    “I thank the NZCBIA for this insightful report into the building and construction sector, which has reconfirmed how critical it is we progress changes to make it easier and more affordable to build, so that we can lift the standard of living for all New Zealanders.” The report can be found here: https://lnkd.in/gqRZp-rv

🙌 Construction site efficiency is the secret to staying on schedule, cutting costs, and achieving project success. On our blog, we've shared practical tips on how you can boost this on your site. Check it out: https://lnkd.in/eMN-bYH3 #Construction #ConstructionEfficiency #ConstructionWelfare #ConstructionSite

Construction faces an increasingly challenging commercial environment. With rising costs, supply chain issues, labour shortages and evolving technology, margins are tight and productivity growth is slow. Construction organisations need to adapt and evolve to manage project costs, promote sustainability, improve project outcomes and remain competitive. Lean construction offers practical ways to save time and money by focusing on what matters - increasing customer value while eliminating waste: https://brnw.ch/21wOEou

Highly encourage you to read the full article that McKinsey & Company just put out on construction productivity, but I have also summarized a few points from the article below: Unlocking Construction’s Potential: The New Imperative for Productivity The construction industry stands at a critical juncture. With global construction spending projected to rise from $13 trillion in 2023 to $22 trillion by 2040, the demand is clear. Yet, stagnant productivity and labor shortages threaten to create a $40 trillion shortfall in construction output by 2040. Key challenges include: Stagnant Productivity: Despite technological advancements, global construction productivity has barely improved in the last two decades. Labor Shortages: Aging workforces and tight labor markets are exacerbating productivity issues, particularly in advanced economies. Technology Gap: Slow adoption of productivity-focused technologies limits industry-wide improvements. Complex Projects: Increasing project complexity and mismanagement of risk further hinder productivity. To meet future demands, the industry must prioritize systemic productivity improvements, scalable initiatives, and innovative technology applications. Companies and specifically Owners that rise to this challenge will not only help meet societal needs but also gain a competitive edge in the market.

The construction industry is lacking sufficient capable workers, and economic labor productivity (the economic value added per hour worked) has stagnated for decades globally This is a great report by McKinsey that highlights the issues with productivity in the world of construction

Good read on construction productivity trends...

Given the flat trajectory of overall Construction labor productivity metrics, this Industry at large will fall short of construction demand by 40 Trillion by 2040, the time for a major paradigm shift in delivery methods and means is upon our shoulders to deliver on 21st century Construction demand.