Construction Industry Employment Hits Two Year Lows

construction worker sad

Employment levels in the Australian construction industry are at their lowest level in two and a half years, the latest data shows.

Figures released by the Australian Bureau of Statistics (ABS) last week indicate that in the three months to May, the seasonally adjusted number of people employed in the industry throughout the country dropped by 2.3 per cent, leaving that number at its lowest level since the spring of 2009.

In total, before seasonal adjustments, an estimated 997,400 people were employed in the industry throughout last autumn – down 5.5 per cent from the 1.055 million people the ABS estimates were employed in the industry in the three months to May last year.

In terms of states, the Australian Capital Territory has been the worst-hit area, with employment during the most recent quarter down by 26.7 per cent compared to the same period last year.

Elsewhere, compared to the three months to May 2011, Victoria, Queensland, South Australia and Western Australia recorded falls in employment levels of 11.1 per cent, nine per cent, 8.9 per cent and 7.6 per cent respectively, while employment levels are up 5.4 per cent in New South Wales and are virtually unchanged in Tasmania.

construction industry employment australia

The reported fall in employment numbers in Western Australia, however, may be somewhat misleading as some of those employed on resource projects may have been classified as having been employed in mining – where employment in the state is up 31.5 per cent year on year – rather than in construction.

While recent cuts in interest rates will help the outlook, as will some of the initiatives to boost housing in the New South Wales budget, the near-term outlook for construction industry  employment is not encouraging.

According to the most recent Master Builders Australia National Survey, a slight majority of builders throughout the country say they intend to reduce head count over the next six months.  That said, staffing level expectations on the part of participants in the Property Council of Australia’s most recent Property Industry Confidence Survey over the next 12 months are slightly positive.

Moreover, data relating to new home sales and building approvals – critical indicators of near term industry activity and employment prospects – has been extremely poor of late.

By Ahn Jae Wook
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