Major infrastructure projects: Costs and productivity issues
Deloitte Access Economics Client Report
With the Productivity Commission conducting an inquiry into the delivery of public infrastructure, the Australian Constructors Association asked Deloitte Access Economics to investigate costs and productivity trends in the delivery of public infrastructure projects in Australia in recent years.
Key points from the analysis include:
- Consistent with the demand cycles of recent years, relative costs in engineering construction rose notably up until the GFC, but have since moderated some of their gains
- Construction sector wages relative to other sectors grew notably across the same period, but have not fallen back
- Wage growth has been stronger with Enterprise Bargaining Agreements (EBAs) where union impacts are more evident, and wage rises from EBAs
have grown faster than wages in general to a much greater extent in the construction sector than in any other sector
- There is some sign that construction sector productivity relative to other sectors also rose, however it did so to a smaller extent than relative wages did.