PwC construction viewpoints - Brian Hunter

Brian Hunter
Audit partner, Sydney, Australia

What are the three biggest issues facing the construction industry?

Innovation - the Australian construction industry is slower to innovate than a number of other leading countries including the United Kingdom, France, Spain, Germany and United States. The construction industry globally is also slow to innovate.

Industrial relations -- the construction industry is slow to move from unionised workplaces to enterprise bargaining or project specific work arrangements.

What keeps your client CEOs awake at night?

Industrial relations issues such as health and safety at work.

Insurance - the rising costs of insurance, how readily available it is and the financial strength of the insurers.

The economy - interest rates, trends in demand, government policies.

Fraudulent transactions - their occurrence and the control framework to prevent them. Lowering costs, increasing efficiencies, maintaining a competitive edge and brand reputation.

Litigation and claims arising for poor project management or inadequate contractual documentation

How has E-business affected the construction industry and how will it further affect it?

The use of web-based project management systems.

The ease with which documents can be stored and accessed.

E-procurement, including the collective purchasing power of a number of organisations acting together and their ability to negotiate discounts.

Web based presentations to clients.

On-line receipt of requests for tenders and the submission of completed tenders.

Which new business models and contract types do you see evolving in the construction industry?

New business models include the increased use of private financing of infrastructure projects whereby the private sector contracts with government to build, own, operate and transfer infrastructure assets for public use such as schools, hospitals, prisons, etc. As a result, many construction companies are evolving into facility managers, managing infrastructure assets over long periods.

The increased use of alliances for undertaking major projects results in a sharing by the owner and the developer of the risks and rewards of the project development and subsequent operation.

How will the construction industry look in the future?

Further development of alliances; further use of private capital in public infrastructure; greater sharing of risks and rewards.