The American Academy of Business Journal

Vol.  28 * Num.. 2 * March 2025

The Library of Congress, Washington, DC  *  ISSN: 1540–7780

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The primary goal of the journal will be to provide opportunities for business related academicians and professionals from various business related fields in a global realm to publish their paper in one source. The Journal will bring together academicians and professionals from all areas related business fields and related fields to interact with members inside and outside their own particular disciplines. The journal will provide opportunities for publishing researcher's paper as well as providing opportunities to view other's work. All submissions are subject to a double blind peer review process.  The Journal is a refereed academic journal which  publishes the  scientific research findings in its field with the ISSN 1540-7780 issued by the Library of Congress, Washington, DC.  The journal will meet the quality and integrity requirements of applicable accreditation agencies (AACSB, regional) and journal evaluation organizations to insure our publications provide our authors publication venues that are recognized by their institutions for academic advancement and academically qualified statue.  No Manuscript Will Be Accepted Without the Required Format.  All manuscripts should be professionally proofread / edited before submission. After the manuscript is edited, you must send us the certificate. You can use www.editavenue.com for professional proofreading/editing or other professional editing service etc... The manuscript should be checked through plagiarism detection software (for example, iThenticate/Turnitin / Academic Paradigms, LLC-Check for Plagiarism / Grammarly Plagiarism Checker) and send the certificate with the complete report.

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Challenges Facing the Construction Industry in Australia

Dr. Kleanthes Yannakou, Holmes Institute and Torrens University, Melbourne, Australia

Dr. Lucija Boskovic, Torrens University, Brisbane, Australia

Dr. David Robinson, Holmes Institute, Gold Coast, Queensland, Australia

 ABSTRACT

The Australian construction industry stands as a cornerstone of the nation's economy, serving as its largest non-service industry. The industry is already heavily regulated and in the mature stage of its lifecycle and thus has a major focus on operational and financial outcomes. The purpose of the research is to discuss the challenges and opportunities to reverse the relatively low and declining profitability. This research was conducted by means of a literature review of reports, journal articles, and publicly available sources relevant to the Australian construction industry as well as the views of stakeholders. These included associations, councils, companies, government, unions, consultancies and academic researchers.  The identified challenges facing the Australian construction industry have been categorized under the headings of technology, environmental sustainability, gender equality, financial risk, and regulatory considerations. The study recommends that the industry accelerates the use of digital technology, step up efforts to decarbonize, increase the efficiency of deployment of development capital, advance gender balance and empowerment in employment.   Two questions are proposed for further research: How should the sector design, plan, and implement a holistic stakeholder strategic process?  And what are the implications, best practices, and learnings from other industries on how to revitalise a mature industry?   The Australian construction sector is Australia’s largest non-service sector (Construction Expert Working Group, 2022), consisting of 450,000 businesses, the majority of which are small businesses or sole traders (Garrett, 2022), with just 20 large firms accounting for 68% of all contracts awarded (Startup AUS, 2017).  The industry has relatively low productivity and declining profitability. In 2022, the construction industry total revenue was AU$437.8 billion, of which profits were AU$39.4 billion, i.e. a 9% margin. Employment was at 1 million. According to the 2021/22 Australian Bureau of Statistics report, the construction industry in Australia accounted for 6.8% of GDP, placing it as the fourth-largest contributor to the nation's GDP (2023A). The construction industry is one of the top four industries for employment, the other three being retail, education, and health care, together employing over 40% of Australians in the workforce.  Australian Bureau of Statistics (ABS) data suggests that labour productivity fell by 2.8% in the construction industry between 2018 and 2021, compared to a growth in labour productivity of 1.7% across the economy as a whole over the same period (Garrett, 2022; Australian Bureau of Statistics, 2023A). In 2020 (updated in 2022), the Australian Constructors Association commissioned BIS Oxford Economics (Australia) to research and report on the opportunity cost of the poor productivity performance of Australia’s construction industry since 1990 (Australian Contractors Association, 2022). One major finding was that “in the eyes of the next generation of workers, construction is an industry that is stuck in the past … the industry has no choice but to transform, if for no other reason than to maintain a workforce large enough to deliver the substantial pipeline of work it is being called on to deliver”.  The research indicated that improvements to the industry’s productivity performance could save Australia AU$47 billion annually. “Government, industry, and unions all agree on the opportunity and, more importantly, the need for change. Incremental change and 10-year horizons are out. To keep the industry alive it must transform, and it must transform now.”  A review by the Construction Expert Working group (2022) described performance between 2017 and 2021 as ‘patchy’(inconsistent) and recommended collaboration between government and industry, citing lack of commitment from both industry and government, narrow profit margins and the complexity of contractual arrangements. The Construction, Forestry, Mining, and Energy Union (CFMEU, 2019) asserted that Australia’s construction industry has reached crisis point, citing cracking apartment buildings and extensive cost overruns in public infrastructure.   

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Factors Influencing Retirement Planning Strategies in the United States Before and After COVID

Dr. Doina Vlad, Seton Hill University, Greensburg, PA

ABSTRACT

The first contribution from this research is that political events and the uncertainty associated with them, influence the retirement assets and their valuation in United States. One practical application of this finding is to increase awareness about asset allocation and re-visit the strategies for investing. Finance advisors should be aware of the political factors when advising their clients about retirement investing. The second contribution this paper is, when retirees hold a big portion of their stocks in companies that are heavily invested outside the United States, their portfolio will suffer from the dollar appreciation. The dollar’s strength reduces their gains, since foreign currencies where the profits were earned are weaker.  A third finding suggests providing more financial education for people. This would aid keeping up with their habits of saving for retirement, not only when the economy is struggling and they feel uncertain about the future, but also when the economy is thriving, and they are able to save even more.  Given the current economic conditions of persistent inflation, and increased economic and politic uncertainties, one should wonder about the future of the retirement system, as we know it. Based on some recent surveys, one of the top concerns people revealed was having enough money to be able to retire.  To answer the above questions, this paper investigates additional factors that might have an impact on the retirement strategies for the future, such as political uncertainty, consumer sentiment, and purchasing power of the dollar. Motivation for adding additional variables to the existing models lies in fast changing economic and politic environments, which in turn increases the uncertainty surrounding people’s perceptions about the future and retirement.  Few papers have analyzed how political factors affect economic results. No paper I am aware of investigated how political uncertainty influences portfolio mix and the value of individual retirement assets in United States.  Analysis of data from before the pandemic reveled that the political factor does not show statistical significance in explaining fluctuations in retirement assets. However, for the second regression covering the pandemic years, the political variable reveals statistical significance at 10% level and positive correlations with the retirement assets in United States.  This is the first contribution from this research; it seems fluctuations in the stock market and retirement asset valuation are influenced by geopolitical events such as wars, international tensions, elections, trade disruptions, and other political factors. Therefore, one recommendation from this study is for finance advisors to incorporate the political risk factor when providing financial guidance for retirement investing.  Since the creation of the Federal Reserve System (FED) in 1913, the US dollar lost more than ninety-five percent of its value. FED’s aggressive money printing since the 2007-2009 recession and continuing with more money printing during the pandemic, influenced the purchasing power of the dollar and the average standard of living for the American citizen.  Before and after the pandemic, results for the regressions reveal statistical significance at 1% level and positive correlations with the retirement assets in United States, for the purchasing power of the dollar variable. A strong dollar gives more purchasing power to US citizens traveling abroad but when it comes to retirement assets, it can get complicated. American companies producing countries with weaker currencies will see decreases in their profits on their financial statements when converting foreign currencies into dollars; the conversion from a weaker currency to a stronger dollar will negatively impact the value of the company’s assets.  The second contribution from this research is that when investing for retirement, if retirees hold a big portion of their stocks in the companies heavily investing abroad, their portfolio will be negatively impacted from the strength of the dollar.

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