Australia’s construction costs have increased 25% over the past five years and 9% over the past 12 months to March. This is the highest annual growth rate since the introduction of the GST (10.2% over the year to March 2001) as per CoreLogic’s Construction Cost Index for Q1 2022. Structural Steel alone has increased 91% since Q4 2020.
Labour Costs
The Australian construction industry currently has a labour shortage and the result of that is an increase in wages to secure skilled labour in a competitive market. The minimum wage has been increased this year by 5.2%, and most award wages have increased by at least 4.6%.
Companies are finding it more and more difficult to secure enough skilled labour to keep projects running on time, and the current market is allowing employees to demand a premium for their expertise.
This is not only impacting the cost of labour to deliver a project but can impact keeping to a project deadline if the correct team is not selected.
Supply Chain Delays
There is a shortage of several well-used construction materials in Australia right now – including steel and cement. This current shortage has been identified as the worst materials shortage in 40 years. Before the pandemic, a wait time for mesh and rebar would be at most 2 weeks, whereas post-pandemic you can be waiting for over 6 weeks. This has immediate repercussions on the project timeline, as suppliers are prioritising their primary clients over others. This is adding to holding costs as interest rates rise.
Interest Rate Rises
Just recently the RBA has raised interest rates again by 0.5% to 1.85%. With more interest rate rises predicted in the near future the importance of ensuring a project runs on time is even more important.
A 0.5% interest rate increase on a $10 million loan is another $4,166 a month, and every week that a project runs over time it cuts into its profitability.
If you have afixed price contract that was secured at the start of 2021 and is now under construction these increases are something that your quantity surveyor and engineer teams need to be taking into consideration to maintain a profitable project. 
How can pre-cast detention tanks help mitigate your risk?
Building your OSD Tanks in situ is time-consuming. There are an array of variables that need to be taken into consideration that can impact the delivery time. Poor weather windows, for example, can put the project back weeks. A longer weather window is required to complete the build. If the project is underway and wet weather causes the hole to become full of water then a low point will need to be created and dewatered, costing time and money.
For example, a recent project installed a Parthenon OSD tank with 200kL of capacity in just 2 days.
With our Parthenon precast tanks built in our production line, we are able to eliminate the effect of weather on our delivery times. We can wait for a short available weather window and have the pre-cast tanks delivered, installed and covered within a few days allowing for a smoother and more predictable installation process.
Because our tanks are all pre-cured, they are immediately trafficable for heavy loads. This removes the need for any laydown area to store material and allows access to all areas of your work site without impacting other critical work pathways. The flexibility of the Parthenon system including its footprint, and internal heights gives you the option to put the OSD tank in a location that suits the overall project, without needing to negotiate the logistical headache of putting the tank in another location so as not to affect access.
Pre-cast on-site detention tanks will also help mitigate the risk of material delays and raising material costs.
We have the ability to look at your project timeline and ensure that the tanks will be ready before they are required. This allows you to be sure that your project will run on time and that the tanks will be there and ready when you want them. If there are material shortages in the market place we have put systems in place to ensure that our supply chain is secure.
We look after our suppliers and they look after us. This means that we are able to get our material at a premium price, allowing us to pass on these savings directly to you.
The combination of the above factors and more allow you to rest assured that your project will run on time. This will allow you and your team to forecast your holding costs. Every week that your project runs over costs you money and effectively impacts the profitability of your venture.
Conclusion
As experts in the supply and installation of on-site stormwater detention systems for commercial projects, Australian Tanks understand the needs of design engineers.
We offer pre-cast tank solutions that are more cost-effective than in-situ detention tanks.
We are here to help you improve your profitability. If you are currently building in-situ on-site detention tanks, consider Australian Tank’s pre-cast detention tanks. They are a more time-effective, and economical solution. We offer solutions for all sizes from 100kL to 2 mega litres and more.
Call us today to discuss if pre-cast detention tanks are right for your project.
