Reputation important for ‘recovering’ construction industry
Australia's construction industry is bouncing back from the global financial crisis, but firms must maintain a good reputation to ensure they can capitalise on the recovery.
This is according to new analysis by IBISWorld, which predicted 3 per cent annualised growth for the sector over the five years leading to 2013-14.
However, the organisation advised building firms that negative publicity could hamper their ability to land major projects. Lend Lease's Barangaroo project in NSW, for example, recently suffered two on-site fires that caused traffic grid locks and large-scale evacuations.
One of the best ways to prevent bad press from accidents or other events is to invest in comprehensive public liability insurance. This protects businesses from claims for property damage and personal injury, which are always a threat considering the nature of working in the construction industry.
Any shortcomings in your policy could leave you open to multimillion-dollar claims that may not only put your personal assets at risk, but also cause significant reputational problems.
IBISWorld noted that organisations must carefully manage any negative publicity that could result from accidents, mistakes or other incidents that occur on projects.
"These factors will remain integral in landing future contracts and helping the companies win a greater share of the growing residential and commercial capital expenditure," the firm said.
Despite this, builders can look forward to a bright future in the construction sector, with low interest rates and rising private and government project spend.
"Construction companies will need to continue adapting their business model to suit the changing market conditions," IBISWorld advised.
In fact, many organisations are already restructuring to reduce costs and boost efficiency in order to take advantage of industry improvements. This is leading to fierce competition, requiring firms to establish a competitive edge over rivals through optimised productivity and better reputational performance.