Construction industry leaders in Australia and New Zealand reconsidering business strategies
The construction industry in Australia and New Zealand is undergoing a significant transformation, with a strong focus on cost-saving strategies, addressing operational inefficiencies, and a shift towards smart, circular, and sustainable solutions.
Nearly all (99%) construction leaders in both countries are actively implementing or exploring cost-saving strategies to maintain competitiveness amid economic pressures, rising costs, and productivity challenges. This includes shifting away from traditional fixed-cost models to more flexible approaches such as equipment hire to avoid idle assets and outsourcing specialist expertise to fill capability gaps and reduce coordination overhead.
Sixty percent of firms are investing in technology to improve project visibility, planning, and delivery, helping tackle inefficiencies and optimize operations in a complex project environment. However, confidence in new technologies' ability to improve efficiency has somewhat declined in New Zealand's civil construction sector, where only 60% see mandatory onsite tech use as a competitive strength.
There is a clear shift towards sustainability and circular models. Nearly 60% of firms prioritize certifications from Green Building Councils, and about half are investing in eco-friendly tools, carbon offsetting, and sustainable building materials. These efforts are driven by ESG considerations and evolving regulatory and market demands.
Major companies like Fletcher Building are exploring strategic pivots such as divesting construction arms, reflecting a sector at a crossroads with structural transformations linked to government reforms and fragile project pipelines. Overall confidence remains cautious; for instance, civil contractors cite a lack of available work and decreasing confidence in business resilience amid these changes.
Australian industry leaders and Standards Australia are collaborating to improve access to construction standards, aiming to enhance productivity, safety, and delivery quality, supporting the transition to net zero emissions and addressing fragmented and costly access to essential standards.
The report, which surveyed over 600 senior decision-makers from mid to large construction businesses in both countries, also revealed that career advancement opportunities within the industry is the third top priority for ANZ decision-makers to attract and retain talent (57%). Hiring or renting equipment is the third top priority for ANZ decision-makers, with 36% prioritizing this.
Nine in ten leaders (91%) expressed confidence in the industry's performance over the next five years. However, global pressures, such as tariffs, shipping delays, and shifting trade regulations, are impacting 92% of ANZ construction leaders. Delays and inefficiencies are still dragging down project delivery and profitability in the ANZ construction industry.
To address these issues, ANZ decision-makers are prioritizing efficiency, flexibility, and long-term sustainability in their operations. Among the top priorities over the next 12 months is investing in technology to improve project visibility, planning, and delivery (60%). Outsourcing specialist expertise is also a high priority, with 51% expressing interest.
The construction industry is moving away from traditional ownership-heavy models towards more agile, circular, and on-demand approaches. Training and development programs for the acquisition of new skills is the top priority for ANZ decision-makers to attract and retain talent (65%). Another 48% of construction firms in ANZ are shifting to sustainable building materials as part of their ESG priorities.
Improved work-life balance through flexible scheduling is the second top priority for ANZ decision-makers to attract and retain talent (65%). Among ANZ business decision-makers who reported experiencing cost impacts from delays or reduced productivity, one in three estimate that these challenges affect an average of 15.5% of a typical construction project's total cost.
This combination of flexible operational models, technology use, sustainability prioritization, and structural industry reforms illustrates the construction industry's ongoing transformation in Australia and New Zealand towards smarter, more resilient, and circular practices designed to reduce costs and overcome operational inefficiencies while meeting future challenges.
Finance plays a crucial role in the transformation of the construction industry, with nearly all leaders in Australia and New Zealand actively seeking cost-saving strategies to adapt to economic pressures and rising costs. This shift includes outsourcing specialist expertise and equipment hire to minimize expenses and overcome capability gaps.
The industry's focus on sustainability is also closely tied to finance, as nearly 60% of firms prioritize certifications from Green Building Councils and over half invest in eco-friendly tools, carbon offsetting, and sustainable building materials to meet ESG considerations and regulatory demands.
