“Instead of sausage sizzles, they want eye fillet steak.”
Construction site lunches have become a hot topic for developers looking to accelerate build programs in the productivity-lagging Sunshine State.
And while union demands for ‘steak on site’ may sound trivial, they reflect growing friction between workforce expectations and developer deadlines, in an industry wrestling with cost blowouts and labour constraints.
“The cost has gone up from $300 to feed 190 people on site to $2000 on a weekly basis to feed these guys. Their expectations are high … it’s the mentality on EBA sites,” the developer said.
They are not the only ones labouring under challenging conditions as the fight to stay on time and on budget grows insurmountable.
For companies such as demolition and remediation group Demex, precision and productivity underpin everything from safety to financial viability of projects. Even minor industrial flashpoints can carry major consequences.
Speaking at The Urban Developer’s leaders lunch, in partnership with Demex, managing director Richard Todd said the scare tactics unions often employed had a tangible impact on the industry, not only in terms of cost but also time delays.
“We’ve cut ties with the union, and walked away from a $20-million contract. But what we’ve done since then is stand up to it.
“We’ve stood up to them, we’ve got guys on the gate, we pay a little bit more for extra security and lock them out, while abiding by the law.
“More [non-EBA] competition will drive productivity in the future.”
Queensland is falling short of the national average construction productivity rate, and the State Government has tasked its newly minted Queensland Productivity Commission to investigate construction productivity.
While a report by the Australian Productivity Commission this year points to policy and regulatory red tape creating construction quagmires, industrial action is also causing sequencing headaches on sites around the country.
It is something Sammut Group’s Julian Sammut is feeling particularly keenly.
Speaking at the industry leaders’ lunch, Sammut says the developer’s Gold Coast site is running at 3.5 days a week productivity, while its projects south of the border are averaging 5 days, including regular Saturday work.
“It’s very frustrating for us, this project on the Gold Coast should have been finished this year but we won’t see it reach completion until September or October next year,” he said.
“We are collectively working with Multiplex on that acceleration program, driving more funds to certain areas and collectively brainstorming ways that we can push the finish of a certain part of the building and get residents in sooner.
“It’s also constrained in terms of this site as to how much we can get on site. We’re averaging 80 to 100 people on site on those 3.5 days.”
But it’s not just the sequencing that is a challenge.
“We really need a way to wrap our buildings so we can do our pours, because this weather is really messing with the program,” he says.
The Bureau of Meteorology has reported that parts of south-east Queensland had already exceeded annual average rainfall, just five months into 2025.
But there may be clearer skies ahead.
The acceleration of construction costs has slowed, according to Rider Levett Bucknall, but technical director Colin Brien says the human capital cost input will not come back.
“Program and productivity is a massive thing,” Brien said.
“Everyone’s talking about pricing coming back, I don’t think pricing is ever coming back, nobody wants to take a pay cut. It’s all about how do we up the productivity, how do we get back those days of work, which we’re really going to struggle to do.”
Brien says there is a big discrepancy between EBA and non-EBA pricing.
“Anyone that’s trying to get a project up that’s over $100 million, they’re really struggling,” he said.
“The spread changes depending on the sector that you’re in, I think that the lower end of the market, the guys in the back of the ute don’t want to mess around, but there’s a big discrepancy.
“It can be anywhere between 10 and 20 per cent on construction costs and in some cases a lot more.”
The trick seems to be in working collaboratively with your builder.
Demex’s Richard Todd says they work in an early-contractor-involvement space predominantly because it fosters a stronger relationship with the builder and more efficient site use and sequencing.
“We’ve managed to be able to not have to take things offsite, build the building pads with the recycled materials, we can talk to the builder and say this is our critical path, instead of having the whole site to ourselves.
“Our upfront costs probably looked more expensive but having one contractor is definitely cheaper.
“There’s lots of innovation in excavation and retention in that space, but everyone keeps to that tradition of knock it down, take it away, and build it up
“There’s huge opportunity for construction demolition circularity and we’ve had the chance to showcase that over a number of projects in the last few years, and there are significant savings.”
Savills state director of project management Arron Fischer says although the construction environment is challenging at the moment, Queensland presented a “pipeline of work”.
“We all know [the construction crunch] is coming, the challenge is going to be about how we deliver that,” Fischer says.
“You’re having to think outside the box a bit more to get projects greenlit, which I don’t think is a bad thing.
“It probably means that collaboration between client, builder and the commercial risk profiles has to even out a bit more, because it has been imbalanced in the past 15 years.
“Everyone has to walk away with a bit of profit at the end of the day.”
While the appetite for risk sharing remains muted, Alceon executive director Tim Cossart says the fundamentals underpinning the demand for housing and migration remain.
“Where we’re sitting in Queensland, it’s a pretty great place to be. Those construction costs are going to be an overhang though,” Cossart says.
“We have far less places for people to live and work than we have people so I think that’s just a really strong underwrite for values and activity in our sector.
“I do get worried about the circularity of the housing problem. Australia needs population growth to drive its economic engine, so we actually need the international migration, then we need the labour to build the housing. We should be saying construction workers virtually get an open door.
“But we should always have an eye to making things work.”
