Productivity Matters: Lessons from Queensland’s Construction Slowdown
For executives ready to sharpen their competitive edge
Australia is in the grip of a productivity crisis. Labour productivity is stagnating, business investment remains stubbornly low compared with our OECD peers, and policy signals, from Canberra to City Hall, haven’t delivered results. CEOs I speak with are tired of talk. They're ready to do.
If you’ve read my previous articles on public sector bloat, non‑market job growth, and the need for lean, high-impact transformation, you’ll know the drill: productivity isn’t improved by taskforces or taxes. It’s unlocked by leaders who act decisively within their organisations.
Now, let’s turn a spotlight on a core sector: Queensland construction.
Australia in the Productivity Slow Lane
According to KPMG’s Q2 2025 update, labour productivity fell by 1% year-ended to March 2025, erasing gains made over the prior five years KPMG Assets.
A recent FT/OECD warning notes net business investment across OECD nations, Australia included, is well below pre‑2008 levels (circa 1.6% of GDP versus 2.5%) Financial Times.
Recent OECD analysis flags Australia as one of the worst‑hit economies when it comes to business investment shortfalls, about 30 % below trend compared to other advanced nations, reflecting weak machinery and equipment spend, declining competition and heightened uncertainty The Nightly+2The Australian+2.
Australia’s IMD Competitiveness ranking slipped from 13th to 18th overall, with our business efficiency ranking diving from 22nd to 37th globally ceda.com.au.
Translated: business leaders… your teams are working harder, but with less capital and fewer modern tools, and global competitors are pulling away.
Queensland Construction: A productivity case study
The Queensland Productivity Commission's interim report (July 2025) paints a grim picture for construction productivity:
Construction labour productivity is only 5% higher than in 1994–95, while the broader market economy expanded by 65% MacroBusiness+3HGBR+3The Australian+3constructors.com.au.
Since 2018, industry productivity has actually declined by ~9%, meaning the sector needs nearly 9% more labour today to produce the same output as in 2018 The Australian+1.
A spike in regulatory burdens, procurement conditions (BPICs), zoning inconsistencies, local approval delays, and flawed IR conditions were all identified as key drivers constructors.com.au.
Key stakeholder feedback includes warnings about rigid EBAs causing entire worksites to shut down over minor issues—yet with no measurable safety benefit HGBR.
The ACA’s View: Jon Davies speaks sommon sense
Jon Davies, CEO of the Australian Constructors Association, has been vocal:
“Business-as-usual won’t cut it.” He welcomed the Productivity Commission’s report as validation that chttps://www.linkedin.com/in/ceoofaca/ must replace lowest-cost risk-shifting models News.com.au+15constructors.com.au+15insideconstruction.com.au+15.
He also welcomed the pause on BPICs, acknowledging safety and training still matter—but they shouldn’t come at the cost of productivity and infrastructure affordability insideconstruction.com.au+3constructors.com.au+3constructors.com.au+3.
In his broader commentary, Davies sees an Australia where construction operates like a modern manufacturer: modular production, prefab assembly, streamlined management—and delivered on time and on budget.
What Business Leaders Should Take Away
You don’t have to solve all this. But there is opportunity for leadership:
1. Pressure-test your operating model
If sectors like construction are wasting 9% capacity due to regulation and IR friction—you should ask whether similar drift exists in your own internal structure.
2. Run focused transformation sprints
There's no excuse for 18‑month programs in an emergency. As I’ve written before, and as smart businesses now know: commit to short, high-impact sprints, measure early wins, build momentum.
3. Develop a stand-out advantage
Innovation isn’t optional. Where others are slowed by regulation or legacy systems, lean, agile competitors who streamline authority and execution get moving—and win.
4. Engage reform-minded voices
Jon Davies and the ACA are calling for rational procurement, clarity in land-use rules, and scaled industrial frameworks. Business leaders should support these reforms—not just complain from the sidelines.
To the Federal Government: Don’t mess up your roundtable
Originally billed as a “productivity roundtable,” the upcoming summit (Aug 19‑21) appears to have morphed into an ACTU-driven tax summit, with red tape reform taking a back seat.
If federal leaders really want private investment to flow:
Stop hiding in tax talk. Real reform is about deregulatory clarity, procurement sanity, and enabling private capital—not squeezing it.
Don’t stage another 'talk shop'. Businesses want action on reform, not another summary of suggestions.
Listen to businesses like those represented by ACA. They aren’t special interests—they're investors and employers going to make or break productivity.
Final Thought
Queensland construction is just one example, but the lessons are clear:
The productivity dial doesn’t turn itself, leaders must wind it.
Smart businesses, from manufacturing to fintech, are finding execution speed, clarity, and focus are the new competitive edge.
If your organisation feels bogged in structure, weighed by process or slow decision‑making, not because you’re under-resourced, but because you’ve lost strategic alignment, I can help reset that balance. It’s what I do.