21 Sep 2020

Construction industry found to have the least efficient projects: research

Press release
Construction industry found to have the least efficient projects: research

How the construction industry can improve its project efficiency for better outcomes. 

A study by researchers at Edith Cowan University (ECU), supported by the Australian Institute of Project Management (AIPM), which analysed the efficiency of a group of projects in different industries has found construction projects in the group had the lowest average efficiency, whereas the mining industry had the most efficient projects.

As part of the study, researchers from the School of Business and Law at ECU, conducted a national survey* of different projects across Australia that had been completed within the last five years. Participants were asked about three key areas of project management - project benefits, the project’s business case and organisational support and sponsorship.

The results of the research showed mining projects in the group were the most efficient, whereas construction projects were the least efficient. Some of the factors that resulted in lower project efficiency were due to a lack of skilled labour, poor cash flow, smaller profit margins, high insurance cost, and the lack of a business case.

Previous research from the University has highlighted the poor productivity levels within the Australian construction industry. Sydney, Melbourne and Brisbane are some of the most expensive cities to build in worldwide, and the boom in infrastructure building has seen similar projects, demanding specific skills, being built simultaneously. In recent years these have included the underground rail networks and new light rail systems in New South Wales, Victoria and Queensland.

“The topic of the construction industry and where there is room for improvement is extremely timely. There is a real momentum in Australia by state governments, particularly in NSW and Queensland to improve the quality of projects in the construction and building industries, to ensure that they are completed to a high standard,” said Elizabeth Foley, AIPM CEO.

“Here at the Australian Institute of Project Management we are supporting this discussion and are currently involved with the NSW Building Commissioner CoP Roundtable with the aim of improving current building codes and conduct. Adding to this, through our research with ECU, we are encouraging organisations, particularly those in the construction sector to look at project efficiency as a means of ensuring that the original investment is maximised,” added Foley.

While the study showed the construction industry in particular was found to have the least efficient projects, the researchers encouraged all organisations to look at ways they can improve their project efficiency, as there were examples of efficient and less efficient projects in every sector.

Richard Hughes, Joint Chief Investigator from ECU explained “finding out why mining projects manage these in a better way requires further study. This is not to say that all mining projects were efficient. It’s just that the projects we looked at placed the efficiency of mining projects higher than the efficiency of construction projects.”

“If you’re a project manager, no matter which industry you’re working in, it’s important to ensure effective communication, collaboration and coordination with your team and stakeholders, as this was often associated with more efficient projects.”

For an in depth look at AIPM and ECU’s joint research download our eBook here.

Elizabeth Foley, CEO of AIPM is available for comment on request.


* The national survey, conducted by the School of Business and Law at Edith Cowan University received 155 responses, of which 45 provided comprehensive data and were selected for further analysis. This is a standard sample size for Data Envelopment Analysis (DEA) research.

 



MEDIA CONTACT

Marcus Sandmann, Chief Marketing Officer, Australian Institute of Project Management
P: +61 411 877 643   E: msandmann@aipm.com.au

 


 

ABOUT AIPM

The Australian Institute of Project Management (AIPM) is the premier, longest-serving body for project management in Australia. We are recognised by Australian business, industry and government as the key promoter, developer, and leader in project management professionalism for over 40 years. AIPM is a member of the International Project Management Association (IPMA).