New research shows confidence boost among business leaders in Australia's volatile construction industry

Kennards Hire's 2024 Construction Confidence Check reveals confidence has increased by 12% from last year, with Australia's construction sector largely viewed as 'stable and resilient to pressures'

SYDNEY, July 22, 2024 /PRNewswire/ -- Today Kennards Hire, Australia's largest family-owned equipment hire company, has released findings from its third annual Construction Confidence Check survey. The results show an overwhelming majority (93%) of construction business leaders view Australia's construction industry as 'stable' and able to withstand pressures to continue growing, a 12% increase from last year (93% in 2024 vs. 81% in 2023).

The 2024 Kennards Hire Construction Confidence Check* surveyed over 410 of Australia's business leaders from small (with 20-99 employees) and large (100+ employees) construction businesses. Its findings provide unique insight into the fluctuating market, how construction business leaders are faring in the current environment, and an outlook on the industry's future.  

Survey findings suggest optimism is strong due to cost-saving measures, with 37% of construction business leaders focusing on increasing the quality of workmanship to reduce rework. Similarly, 57% of those surveyed say their business plan includes investing in technology to manage projects more efficiently and effectively over the next 12 months.

Tony Symons, General Manager, Commercial at Kennards Hire said: "Investment into the construction industry is booming like never before, so this year's Construction Confidence Check survey results of increased confidence are not surprising. We are currently seeing unprecedented levels of construction activity in every state in Australia, and this work is expected to continue for at least the next three years." 

"Our annual Construction Confidence Check survey gives us insight into the industry and helps us anticipate trends and stay informed on the challenges facing our customers. For example, we found that on average, construction business leaders surveyed say the proportion of total lost productivity hours on their worksite due to old and faulty equipment is 28%. Opting to hire equipment rather than purchasing gives access to products with the latest technology without the burden of ownership, reduces upfront costs, and enables participation in the sharing economy, which we have also found contributes to our customers' ESG goals," said Symons.

Industry perceptions on ESG are also included in this year's survey, with nine in ten (90%) construction leaders admitting to having an ESG strategy in place or plans to implement one. 

When it comes to prioritisation, construction business leaders surveyed say there are three main factors in their ESG approach:

• Meeting mandatory ESG requirements as a project supplier (34%)
• Collaborating with Indigenous-owned suppliers through social procurement (33%)
• Obtaining project site accreditation from the Green Building Council of Australia (33%).

John Holland recently partnered with Kennards Hire to trial a hydrogen generator for Sydney Water's new Upper South Creek Advanced Water Recycling Centre, which will provide wastewater services to Western Sydney.  

Chief Operating Officer David Lehmann said: "This trial demonstrates the importance of our supply chain as enablers of how we'll utilise new technologies and innovation across our projects." 

Notes to the editor:

The findings from the 2024 Kennards Hire Construction Confidence Check are the result of a survey conducted by YouGov from 13 - 21 May 2024. The sample comprised of 410 senior business leaders/ decision makers from small construction businesses with 20-99 employees and large construction businesses with 100+ employees in Australia.

About Kennards Hire:

Kennards Hire is an Australian family-owned and operated company that has been in the hire industry for 75 years, with over 200 sites and branches across Australia and New Zealand. Since 1948, its product range extends from general hire equipment for the home renovator and professional tradesperson to specialist equipment and heavy machinery used on some of the largest civil infrastructure and commercial construction projects in two countries. Proud member of Family Business Australia & New Zealand, Member of Hire & Rental Industry Australia and Hire Industry Association New Zealand and Premium Partner of Sydney Football Club. kennards.com.au

Key Findings: 2024 Kennards Hire Construction Confidence Check Survey 

Methodology: Findings from the 2024 Kennards Hire Construction Confidence Check are the result of a survey conducted by YouGov from 13 – 21 May 2024. The sample comprised of 410 senior business leaders/ decision makers from construction businesses with 20+ employees in Australia.

Stability / Confidence

• The majority of construction business leaders surveyed (93%) view the construction industry as 'stable' and 'resilient to pressures' – a significant increase from 81% in 2023
• Less than 10% of construction business leaders think the industry is 'instable' (7% total)
• This year, more survey respondents selected 'strongly agree' that the construction industry in Australia is stable, which is significantly higher than last year (67% compared to 37% last year).

Macro issues

• Consistent with last year's findings, the top 3 macro issues to solve for to achieve stability and growth in the next 5 years are:
     1. Rising cost of materials (41%)
     2. Skilled labour shortages (38%)
     3. Rising cost of equipment (36%)
• One in three (33%) construction business leaders surveyed say rising interest rates are one of the key macro issues that need addressing to achieve stability and growth in the next 5 years
• Construction business leaders surveyed is set to prioritise two key industry improvements to attract more people:
     4.Training and development programs for acquiring new skills (58%)
     5. Improved work-life balance through flexible scheduling (56%) 
• Other issues to solve for that have increased from last year:
     6. Slow adoption of sustainability practices (32% this year vs 26% last year)
     7. Collapse of competing businesses (31% this year vs 23% last year)
     8. Insufficient government funding and support (30% this year vs 25% last year)
     9. Slow digital transformation (30% this year vs 17% last year)

Productivity

• On average, construction business leaders report the proportion of total lost productivity hours on their average worksite due to lack of equipment/ old/ faulty equipment is 28%.
• Construction business leaders in NSW and VIC are more likely than those from the rest of Australia to report a higher proportion of total average lost productivity hours on their average worksite (average of 29% vs 27%).

Investments

• In the next 12 months, construction business leaders will prioritise investing in technology for more efficient project management (57%), followed by hiring additional staff (48%).
• While one in three (35%) construction business leaders surveyed say their business plans to rent more equipment from suppliers.
• Although most construction business leaders believe the industry is stable and resilient, their businesses are currently implementing cost-saving measures. These include:
     1. Improving workmanship quality to reduce rework and warranty issues (37%)
     2. Actively seeking competitive pricing for materials and services (36%)
     3. Adopting sustainability practices for long-term savings (36%)
     4. Investing in innovative equipment to improve efficiency (35%)
     5. Workforce training to enhance productivity and reduce mistakes (34%)

ESG

• Almost all (98%) construction leaders with an ESG strategy, or plans to implement one, trust their suppliers' ability to help achieve their ESG goals. Among them, two-thirds (66%) are extremely confident.
• Construction leaders are set to prioritise five main factors in their ESG approach:
     10. Meeting mandatory ESG requirements as a project supplier (34%)
     11. Collaborating with Indigenous-owned suppliers through social procurement (33%)
     12. Obtaining project site accreditation from the Green Building Council of Australia (33%).
• These are followed by using "green equipment" or eco-friendly tools (32%), diversity and inclusion of workforce (30%) and using eco-friendly/ sustainable materials (30%).
• Fewer than 30% of construction business leaders prioritise the following factors within their top three:
     1. Waste management and material recycling (28%)
     2. Investor and/or Board support (28%)
     3. Decreasing consumption of natural resources (27%)
     4. Achieving net zero or increasing carbon offsetting (27%)

SOURCE Kennards Hire