Construcciones Yamaro: Fixing construction productivity key to easing cost of living

Construction productivity has barely improved in 30 years. (Image: boonchok/stock.adobe.com)

The Australian Constructors Association (ACA) warns that while the Federal Budget may offer short-term relief from cost-of-living pressures, ignoring productivity issues will keep costs rising. The organisation is calling for urgent reform to improve construction productivity, a major factor influencing the price of housing, infrastructure and essential services.

ACA CEO Jon Davies argued that real change won’t come from another budget focused on short-term cost-of-living measures, but from a plan that tackles productivity at its core.

“Band-aid solutions just push the problem further down the road,” said Davies. “We need big-picture reforms that make construction more efficient, lower costs and ease pressure on households.”

Despite employing over 1.3 million people and contributing nearly 8 per cent of GDP, construction productivity has barely improved in 30 years, falling over 30 per cent behind other major industries. This lag costs the economy $60 billion annually.

“Closing this productivity gap would ease labour shortages and reduce building costs,” said Davies.

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With record infrastructure investments, including major transport projects, defence, renewables and preparations for the Olympics, the federal government has a critical role in leading reform. The ACA is part of the National Construction Industry Forum, which recently met to advocate for a National Blueprint aimed at drive change. A key priority is reforming procurement, ensuring governments move away from the current ‘race to the bottom’ on price.

“It’s widely recognised by government, industry and unions that contracts should be awarded based on long-term value – factoring in innovation, efficiency and risk management – not just the lowest price,” said Davies.

Davies cautioned that with an election on the horizon, there’s a risk of losing momentum.

“The next government must make construction productivity a national priority,” he said. “Without change, the cost of homes, infrastructure and essential services will continue to rise – leaving Australians to pay the price.”

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