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Construction, Business, and the Government

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The construction industry plays a distinct role in the economic growth of a country. It provides the basis upon which other sectors can grow through the construction of structures and facilities that is needed for the production and distribution of other industries’ products and or services. The construction industry also has great employment-generating potential for labor-intensive work. It can also generate employment with other industries like; transportation, manufacturing, commerce, and finance. 

In Australia, the construction industry is the third-largest sector because of the number of people it employs, plus its shares in the GDP. Last year, over 1.15 million people, or 9% of all the jobs in Australia, came from the construction industry. And it generated over $360 billion in revenue from that same year. 
It’s a major key player in the Australian economic landscape. 

Construction as a Business Venture 
As a business, the construction industry historically is cyclical. According to Investopedia, a cyclical industry is sensitive to the business cycle, the revenues are higher in times of economic prosperity and they are lower in periods of economic downturn. 

It is also one of the least technologically advanced sectors, along with agriculture. Its data is still entered manually, and they normally still have a load of physical paperwork that causes delays. The construction industry is typically 20% slower in completing its projects. The industry as a whole is slow to embrace technological advancement in general. 

However, despite the many obstacles of this industry, it is not stagnant. It is on the verge of a different path wherein technological advancement will drive its growth. There is already a growing number of construction technology companies who are in the process of creating new technology to push this industry to new heights. Because of these new advancements, the industry has garnered a wide space for growth making it an exciting time to invest in it.

Construction industry and the Government
In Australia, the construction industry has not improved substantially in its products for decades. It wastes up to 30% of its productivity efforts. But this challenge is not limited to Australia either. This challenge arose because of how the industry is structured, its complex services that are seemingly increasing, and the operation of silos. 

There have already been several studies, reviews, reports, and even inquiries conducted on how to address this challenge for the construction industry. These studies have a range of common themes to reduce wasted effort. Such as; the use of technology to improve the project outputs, project management skills improvement, development of better supply chain integrations, and procurement process improvements. 

Despite, the vast amounts of studies and recommendations that were published to address the industry’s major challenge, there has been little to no adoption or integration of these recommendations into actual practices. Even if the studies and recommendations have provided results from other industries of the massive increase in productivity and lower costs of operations plus happier participants. There has still been little to no change that has occurred within the industry to address this problem.

The role of the Government and its importance to the construction industry is massive. Governments have control over the regulatory and legislative arrangements that are standardized and currently governs the industry as a whole. Even more critical is that the Government is also a major client for the industry. The way the industry and the Government interact impacts the success and health of the industry in general, as well as the success of the Government in delivering its planned structural programs. 

The industry on its own is already doing a lot of the work for the reforms, starting at the bottom and all the way to the large and key influential companies within the industry. But the industry is limited in attaining the pace of change it needs to stay competitive with its trading partners without the Government’s leadership.

As a whole, the construction industry is one of the leading sectors in the Australian economy and it employs thousands upon thousands of people in its roster. And it has contributed billions of dollars to its socio-economic growth. 


Shivendra helps construction companies and contractors win more projects and grow profitably. Regarded as a master of practical implementation, Shivendra has guided organizations such as Downer and Siemens as well as smaller contractors to achieve double-digit improvements to their bottom line. Underpinning his extensive industry experience are qualifications in engineering and a Ph.D. focused on rapid cost improvement techniques. He is the author of two books, The Competitive Contractor and From Paper to Profit, host of the Competitive Contractor podcast, and the founder of Shivendra & Co and The Constructors Network. You can find more about Shivendra & Co on www.shivendra.com.