The top challenges facing mid-sized Australian construction businesses are increased cost of materials (63%), shortage of skilled employees (49%) and increased cost of business overheads (42%), according to a recent survey commissioned by business management platform MYOB. In response to rising prices, 51% of respondents have reduced their margins, 49% have absorbed additional costs and 41% have passed on higher costs to customers.
The survey of 174 decision-makers from mid-sized Australian construction and trades businesses (20-500 FTEs and minimum $5 million annual turnover), found that despite current difficulties, respondents demonstrate determination to thrive. While almost half are fuelled by the ambition to maintain a steady income (47%), two thirds (41%) want to scale or grow the business and 38% are driven by a desire to diversify or expand their offering.
“There’s no denying mid-sized businesses in construction and trades have felt the brunt of the economic environment in recent years, with costs going up and widespread caution with regard to spending,” said Kim Clarke, General Manager for Enterprise at MYOB.
“However, despite these setbacks and the liquidation of many larger players, mid-sized construction and trades businesses show remarkable resilience and capability. These businesses are often more nimble and able to adapt quickly to change, compared to larger enterprises.
“Innovation is at the forefront for ambitious businesses, and 82% of survey respondents have invested in innovation in the past 12 months. This will help those hungry for growth to keep a laser focus on their operations and ensure they are maximising the productivity and efficiency of their business.”
The top investments in innovation over the past 12 months include new software solutions to manage the business (51%), improving project management (48%), and tightening or improving supply chain (42%). These are the same top three priorities respondents are looking to innovate or change in the coming 12 months.
“With 85% of construction leaders we polled agreeing the industry will change significantly in the next five years, investing in their business will be essential for those looking to stay ahead of the pack. These business owners know that staying across technology developments and making investments to support their growth will be imperative to their success.”
The most significant factors expected by those anticipating change in the industry are the rising cost of materials (49%), and new design technologies such as AI assisted design (42%), and skilled workers (36%) and new construction technologies (36%).
Almost two thirds (63%) of the respondents anticipate increased revenue in the year ahead, and 60% say their current revenue is up compared to a year ago. Sixty-three per cent also have more work on, or sales in the pipeline, in the next three months compared to what they would normally expect in this period.
“With an emphasis on the future, and anticipation of an uplift in revenue, many business owners are getting match fit by adapting their operations, in order to successfully navigate the next chapter,” said Ms Clarke.
“Mid-market construction businesses have made their way through a challenging few years, and it’s encouraging to see how many are looking purposefully toward the future.
“They are aware of a changing industry, and the challenges ahead, and are prioritising investments and innovations that will ensure the health and growth of their business.”
ENDS
Media contact:
Selina Ife
Media Manager
E: selina.ife@myob.com
About MYOB Enterprise
Scalable to meet the needs of growing businesses (from 20-1,000+ FTEs), MYOB Enterprise offers an integrated, all-in-one business management platform that helps mid-market businesses achieve their ambitions by connecting critical workflows through Enterprise Resource Planning and Customer Relationship Management, Payroll, and Workforce Management solutions – all backed by world-class software tailored specifically for the Australian and New Zealand markets. MYOB Enterprise also offers leading practice management solutions for Professional Services businesses. MYOB’s award-winning Advanced Business platform (powered by Acumatica) has been rated 4.5/5 stars by mid-market customers across Gartner’s Digital Market brands (Capterra, GetApp and Software Advice), and is named as a shortlist recommendation and 2021 category leader across the sites. MYOB Advanced has also been independently recognised as a leader in innovation through the global SaaS Awards and name an ABA100 Winner in The Australian Business Awards 2022 for ERP Innovation and Cloud Innovation.
About the research
Research for MYOB’s Mid-market Construction Snapshot was conducted by Dynata. A combined total of 274 mid-market business leaders and decision makers (with between 20 and 500 employees) in the construction sector from Australia (174 respondents) and New Zealand (100 respondents), took part in the survey. Respondents were sampled from the Dynata online business profile panel sources, and screened to ensure they met the qualifying criteria. The survey was conducted from 27th April - 29th May 2023.