“Pipeline uncertainty” a risk for business confidence

There has been a reversal of fortunes since last year for consultants working in several areas across the built environment, with “pipeline uncertainty” – a lack of clarity around coming projects – a major cause.

In its annual survey into business capacity staffing impacts, market confidence and future challenges, Consult Australia gathered responses from businesses in design, advisory and engineering.

Published in Consult Australia’s Confidence & Continuity Report, the results show a “reversal of fortunes” since 2023, says CEO Johnathan Cartledge.

“Consulting businesses are at the front end of projects and are, therefore, susceptible to pipeline uncertainty more than the broader industry delivering Australia’s infrastructure.

“A significant percentage of our members say they have capacity to take on more work – and in some sectors, after years of capacity constraints, there is not enough work. Having some capacity gives businesses the breathing room to bid on new work, but this can become a concern when the continuity of work is not certain.”

Commercial buildings (57 per cent) led the sectors most likely to lack work, with rail (53 per cent) and roads (52 per cent) following. But 77 per cent of respondents across almost all sectors expected to have capacity within the next 12 months.

Changing tides

In 2023, respondents reported “too much work” in most sectors.

The 2024 survey also shows that 57 per cent of businesses have redeployed staff to alternative projects due to pipeline changes, and 46 per cent have made resource cuts.

A noteworthy 70 per cent of respondents cited the “escalating costs of doing business” as their biggest challenge, followed by pipeline uncertainty (57 per cent), staff recruitment (51 per cent) and the availability and affordability of professional indemnity insurance (41 per cent).

“A massive 73 per cent of respondents told us they were operating in a higher risk environment than just 12 months ago,” Cartledge says. “Uncertainty and lack of pipeline visibility makes it more challenging for businesses to invest in the future. This is a message we will continue to take to governments as they outline their spending priorities and plan the projects needed to meet the impact of population growth we already see.”