Labour shortfall fears
Industry says public infrastructure projects in jeopardy
There are fears hundreds of billions dollars of public infrastructure projects will deepen a shortfall of skilled labour in the construction sector.
In recent years the construction sector has taken the brunt of a confluence of factors which created the socalled profitless boom that sparked a surge in insolvencies, including a string of well known company collapses.
Last year, the share of construction sector administration appointments reached 33 per cent of all company collapses as the sector started to slow after a period of surging demand sparked by low interest rates, and first-home owner and HomeBuilder grants in the residential sector.
While some issues behind the profitless boom, such as material cost increases and supply chain problems have settled, demand for skilled labour has never been higher, with a list of infrastructure projects forecast to suck up skilled tradies.
According to Infrastructure Australia, there is a major public infrastructure pipeline valued at $230bn over five years, while at the same there is a target of building 1.2 million new homes as well as major investment in the energy sector.
It said Australia’s infrastructure workforce would need to grow by 127 per cent to meet demand.
Michael McNab, managing director and founder of the diversified South East Queensland builder McNab, said he was concerned over the ambitiously high public infrastructure rollout.
“The infrastructure rollout for the next three or four years is huge. They are amazing numbers and it preys at the back of my mind,” Mr McNab said. “Hospital rollouts, transport, the Olympics, renewables – we have every sector firing at the same time. It’s fantastic but it’s going to put a strain things.
“Labour is still difficult and we do need more skilled migration. It’s basic supply and demand means prices go up but it also means that productivity goes down. One of the big issues is productivity.”
Mr McNab, whose family company has about 500 staff, believes skilled labour migration will play a role in any solution. “We have a lot of apprentices and the industry on balance could still do more with training, but we need an influx now. We can’t wait three to five years,” he said.
Infrastructure Australia’s 2023 Infrastructure Market Capacity report found that the country’s infrastructure, housing and energy agenda was under threat amid challenges accessing local building materials and a shortfall of 229,000 public infrastructure workers.
The report found that, while the sector was finding it harder to source key building materials it also had difficulty finding skilled workers.
Richlister and developer Kevin Seymour said conditions in the construction sector had never been worse.
“I have never seen the building side in such a bad way. This is the worst I’ve seen in my entire life,” Mr Seymour said.
“The problem they have is that there are no resources there. There is a real big risk of not having the ability to create all of this infrastructure.”
According to the annual BCI Construction Outlook report, 90 per cent of builders surveyed identified labour shortages as a key risk to their business, adding to the uncertainty of on-site work scheduling and potentially causing developers to shelve projects.