Construction Firms in Australia and New Zealand Lose $36.5 Billion in Labour Costs on Unproductive Work

Construction Firms in Australia and New Zealand Lose $36.5 Billion in Labour Costs on Unproductive Work

New research reveals construction productivity hindered by disconnect between technology investment and needs of field workers

December 3, 2018 – Auckland, New Zealand – Construction businesses in Australia and New Zealand are currently losing a third (33 percent) of all working hours to unproductive activities. Each construction worker on a jobsite spends 11.5 hours every week on non-optimal tasks, costing the industry $36.5 billion according to Construction Disconnected, a new report from construction productivity software provider PlanGrid and management consulting firm FMI Corporation.

The survey of 80 construction industry leaders from Australia and New Zealand found the most time-consuming unproductive activities are: looking for project information (4.9 hours), conflict resolution (3.4 hours), and dealing with mistakes and rework (3.2 hours). This comes despite most businesses (46 percent) saying improving productivity is the main reason behind their technology investments to date.

Construction firms’ productivity is being hindered by poor data and communication. According to the survey, the most common reasons for tasks taking longer than expected are: poor communication between stakeholders (29 percent), lack of confidence in data accuracy (23 percent) and delays in receiving information (18 percent). In addition to causing inefficiency, these shortcomings are contributing to expensive mistakes; poor data and communication will cause a total of $8.4 billion in rework in 2018 alone.

Firms are turning to technology to address the challenges caused by poor data and communication, but may still be investing in the wrong tools. Based on survey responses, the top purchasing drivers behind investments in digital tools are: improving the accessibility (36 percent) and accuracy (34 percent) of project data. However, the report points to a disconnect between the priorities of those selecting technology and the needs of field workers. At present, technology is purchased mainly to suit the needs of the office (54 percent) rather than workers in the field (36 percent). Only 17 percent of firms considered gathering feedback from potential users of solutions before making the purchase.

“Construction firms in Australia and New Zealand are experiencing a concerning productivity shortfall,” said Tomy Praveen, APAC managing director of PlanGrid. “Although many companies have started to invest in technology, these tools aren’t meeting the needs of workers on the jobsite where real performance improvements can be made. As a result, firms aren’t getting the full value of their technology spend and productivity is lagging, while employees are left disconnected and disengaged.”

The relatively low use of mobile devices highlights the technology gap between the office and the jobsite. Only 44 percent of construction firms give mobile devices to project managers and field supervision – compared to a global average of 75 percent – and only eight percent of firms consistently use those devices to access data or collaborate with project stakeholders. When technology fails to meet expectations, it is due to the solutions being a poor fit with existing working practices (39 percent) or technology (11 percent), as well as inadequate training (11 percent).

“In New Zealand, the KiwiBuild initiative is calling for innovative technology and productive construction to drive down costs and make housing more affordable,” said Praveen. “Investing in the right technology on jobsites will deliver savings and reduce rework, not just for the residential market, but any major construction project in the heavy civil, commercial and residential sectors. By bringing field workers into the conversation when selecting technology will not only benefit individual firms but help to keep construction in Australia and New Zealand at the forefront of the industry worldwide.”

The full Construction Disconnected report is available here.
You can also read more in our blog post about the report.

About the survey
In April 2018, FMI Corporation partnered with PlanGrid to survey 599 global respondents of which 80 construction leaders and decision makers originated in Australia and New Zealand. The research discovered how teams spend their time while on a jobsite, challenges associated with poor data management practices and miscommunication and their technology investments. Of those surveyed 49 percent work for general contractor firms, 27 percent came from specialty trades and 24 percent were owners.

About FMI
For over 65 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment. FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry. FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results. For more information, please visit https://www.fminet.com. Follow FMI on Twitter and LinkedIn.

About PlanGrid
PlanGrid builds simple, powerful software construction teams love to use. The company’s mobile-first technology gives general contractors, subs, owners and architects access to information in real-time, enables great collaboration and provides actionable insights. With PlanGrid, any construction team member can manage and update blueprints, specs, photos, RFIs, field reports, punchlists and other information from any device. PlanGrid is used on more than one million projects across commercial, heavy civil and other industries in 90 countries. Headquartered in San Francisco and founded in 2011, PlanGrid has $69 million in funding from Sequoia Capital, Tenaya Capital and other top venture capital firms. Visit us at www.plangrid.com.

For more information, please contact:
Adele Bernard
Marketing Director, APAC
PlanGrid
adele.bernard@plangrid.com