Industry Survey

CONSTRUCTION AS USUAL?

ROADS & INFRASTRUCTURE’S PUBLISHER PRIME CREATIVE MEDIA HAS CONDUCTED A SURVEY OF THE ROAD CONSTRUCTION INDUSTRY TO ASSESS THE EFFECTS OF THE CORONAVIRUS ON OPERATIONS. WHILE EVERY CORNER OF THE INDUSTRY HAS BEEN IMPACTED BY THE VIRUS, THE SURVEY REVEALED THERE IS HOPE.

The construction industry has seen its fair share of highs and lows as a result of the coronavirus.

When restrictions began it was unclear which sections of the industry, if any, would be deemed as essential. There were also doubts about when and how projects would be able to go ahead.

However, it soon became evident that construction in many of its forms would continue throughout the pandemic and more recently the construction industry has been seen as a beacon of hope for economic growth.

In April, the Australian Asphalt Pavement Association confirmed road construction was an essential service and would continue through the pandemic. Shortly after, announcements began to pour in from state and federal government about

What best characterises the effect of COVID-19 on your business at present.? Very negative. Somewhat negative. Not a lot of impact. We have seen some increase in business. 17.2%

43.01%

29.57%

10.22%

Results showed around 30 per cent of respondents said they had seen little impact and 10 per cent said they had seen some increase in business.

projects and stimulus boosts expected to benefit the industry and economy.

Nearly every Premier indicated that construction would be a key element in the economic recoveries of their respective regions.

Fast-tracking became the new buzz word, as areas looked to get started on construction projects earlier than planned to keep funding flowing and people in jobs.

In June 2020, Prime Creative Media conducted an industry survey for the readers of Roads & Infrastructure to estimate the impact of COVID-19 on the civil construction industry.

Responses came in from nearly 200 businesses across the country. The size of businesses ranged from up to 10 workers, right through to companies with over 500 employees.

Results showed that 60 per cent of respondents noted COVID-19 has had a negative impact on business. Around 17 per cent citied very negative effects and 43 per cent recognised somewhat negative impacts.

The other 40 per cent of responses showed little impact (nearly 30 per cent) and 10 percent of respondents said they had seen some increase in business.

These responses indicated that while there has been a big push for construction activity to continue, even companies that were allowed to continue works during the pandemic have seen challenges.

In addition, survey answers regarding when individuals thought business would return to normal were varied.

An almost even percentage believed business would return to previous levels in three to six months or six to 12 months. Some optimism was presented as 12 per cent of respondents believed business as usual would return in the next one to three months.

However, more than 18 per cent of respondents thought it would be over a year before businesses returned to previous levels.

At the time of writing in mid June, restrictions are beginning to ease across the country. Some state borders remain closed and in many places, people are being advised to continue working from home where possible.

The Treasury is forecasting that National Cabinet’s plan for a three-stage restriction easing process will see 850,000 people back in work.

What best describes your hiring intentions for the next 12-24 months?

We will operate with a reduced number of staff. 19.35%

We hope to rehire any staff laid off or stood down

We don’t expect to create new positions. We hope to create more positions in the next 12 months. 8.06%

40.86%

31.72%

Results showed around 30 per cent of road construction businesses hoped to create new positions over the next 12 to 24 months.

When asked what hiring intentions businesses have for the next 12 to 24 months, nearly 41 per cent of survey respondents did not expect to create any new positions. On the contrary, nearly 32 per cent hoped to create new positions.

Eight percent of respondents hoped to rehire any staff laid off or stood down and the remaining percentage said they would be operating with a reduced number of staff.

At the beginning of the escalation of coronavirus the Federal Government announced its first $17.6 billion stimulus package. This included a commitment of $1.3 billion to help small businesses in supporting the jobs of around 120,000 apprentices and trainees.

Eligible employers were able to apply for a wage subsidy of 50 per cent of the apprentice or trainees wage for up to 9 months from 1 January 2020. We have seen businesses such as Hastings Deering take on apprenticeships during this time to bring new talent into the industry.

On top of sourcing new talent, many industry leaders have classed this period of time as a great opportunity for development and innovation in the construction industry.

In an interview with Roads & Infrastructure in May, Michael Caltabiano CEO of the Australian Road Research Board said we don’t often get the opportunity to pause and we have been forced to pause now. He said it would be a great tragedy to lose the opportunity of a forced pause to enact change.

He said it was important that stimulus funding lead to the legacy of a much safer road system and pointed to the importance of ensuring industry developments in sustainability are continued.

When asked how they would approach research and development over the next 12 to 18 months, survey results showed 52 per cent of respondents were exploring new technologies and services to make their companies more efficient.

Only 13 per cent said research and development funding would be reduced. The remaining 34 per cent indicated that projects will continue for the next 12-18 months but new investments would be put on hold.

Staying informed about industry advancements, innovations and projects has been important for many businesses during this time. Respondents were asked about the level of trust they have in industry media and results showed trade magazines or journals were the most trustworthy. This was followed by emailed newsletters, media websites and social media, in that order.

While the impacts of the coronavirus continue to be felt by many in the industry, whether in projects, employment or research and development, it is clear that road construction companies are optimistic about economic recovery.

Responses showed awareness for the importance of a continued marketing presence, alongside the need for the upkeep of research and development.

It appears if the country continues to flatten the curve of infection, restrictions may continue to ease and the next question for industry will be what the new business as normal might look like.