If you are working in the construction industry in Queensland, we don’t need to tell you that things are getting tougher. Everywhere you look, there is more demand for new homes, apartments, industrial sheds or warehouse and infrastructure projects, but getting them built is another story.
During a recent industry presentation, there were significant challenges discussed facing Queensland’s construction sector. The message was clear: demand for housing and infrastructure is growing but supply bottlenecks, workforce shortages, productivity and regulatory delays are significant issues businesses are facing or will be starting to face over the next few years in Queensland.
One of the speakers summed it up well: “We are hitting walls with not enough workers, approvals that drag on, costs that keep climbing and compliance requirements that feel like they never stop”.
It is not just about delays on site, either. These pressures are flowing straight through to the bottom line. Cash flow is tighter, forecasts are harder to trust and businesses are under more scrutiny to meet QBCC obligations while still keeping the lights on. The reality is that these challenges are not going away anytime soon and for many operators, the next few years are going to take careful planning and strong financial management just to stay steady.
The Key Challenges Ahead
Outlined below are the challenges the construction industry is currently facing.
Housing Supply Pressures
Queensland simply is not building enough dwellings to keep up with population growth. In fact, dwelling completions per new resident have fallen below long-term averages. Current projections are indicating that new housing will fall short of the ambitious target for new housing set by the National Housing Accord.
Regulatory & Compliance Delays
Planning approvals and compliance requirements keep dragging projects out. These delays tie up cash flow and make financial forecasting a nightmare. On top of that, QBCC reporting rules are getting more difficult, forcing businesses to stay financially strong and ensure that thy are trading solvent and responsibly. While this raises the bar on administration and monitoring, it also helps protect both builders and clients by promoting responsible trading and long-term sustainability across the sector.
Labour Shortages
Perhaps the most pressing issue is workforce supply. Although population growth in Queensland is strong, the proportion of working-age residents is shrinking relative to dependants. Projections are showing that demand for construction workers is far higher than supply.
Construction workforce demand is projected to exceed supply for years to come, keeping wages high and subcontractor availability tight. There is also currently a lot of commentary highlighting the looming contest for trades and subcontractors as Olympics work ramps up, suggesting careful planning will be required to avoid starving the residential sector of workers.
Rising Input Costs
Ongoing labour shortages and regulatory delays are likely to increase project costs alongside supply chain pressures which are already contributing to increasing costs across the industry. Businesses may need to look at securing long lead items early to ensure projects are not delayed any further from waiting for material to arrive on site. Careful planning and management of cash flow will be required to ensure the business can support the holding of increased raw materials over a longer timeframe.
How Accountants can support Building & Construction businesses
In this environment, accounting and advisory support becomes more important than ever. Our firm looks to work with building and construction clients to help them adapt to these conditions by focusing on the following:
Staying Compliance with Queensland Building & Construction Commission (QBCC) Requirements
Construction businesses face increasing regulatory and contractual obligations. We assist clients with preparing and reviewing their annual QBCC financial reporting obligations. Throughout the year, we monitor key measures such as the current ratio and net tangible assets so business can stay compliant. Where risks are identified, we will provide strategies to strengthen the Balance Sheet and address potential issues before they escalate.
Cash-Flow Management
Labour and material shortages are stretching project timelines, which often means payments get pushed back. For builders and developers, that creates real pressure on day-to-day cash flow management. This is where having the right financial systems and advice makes a big difference.
We work with clients to put cash flow forecasting in place so they can see problems before they hit. Progress payment tracking helps keep visibility on what has been billed, what is outstanding and when the next drawdown is due.
The goal is simple to give construction businesses the right cash flow planning to keep projects moving, even when timelines stretch.
Business Structuring for Growth
As demand for housing and infrastructure grows, many businesses will need to scale up operations. We can advise on business structures and tax planning to ensure growth is sustainable and compliant. This includes Succession Planning, Asset Protection, and setting up structures that are flexible enough to manage growth opportunities.
Industry Outlook
The construction outlook is challenging, but also full of opportunity. Businesses that take a proactive approach to financial management will be in the best position to thrive. Accountants are strategic advisors who can help navigate uncertainty, strengthen profitability and support long-term growth for your business. Archer Gowland Redshaw continues to work closely with clients in the building and construction industries to provide tailored advice, safeguard their financial position, improve resilience and identify opportunities for long-term success.
For More Information
For more information on your building and construction business, please contact Greg Rankin – Manager or Smiljan Jankovic – Managing Director on (07) 3002 2699 or via email (gregr@agredshaw.com.au; smiljanj@agredshaw.com.au).
