The oversupply of tradespeople in residential construction has worsened, with nine out of 13 trades recording a surplus of tradespeople throughout the June quarter, the latest HIA Trades report has revealed.
The report, which comes amid predictions of housing starts returning to GFC level lows and calls for measures to reduce the tax burden on the housing industry, shows that the impact of the residential construction downturn is flowing through to the sector’s workforce.
The report shows that in the June quarter, the total level of tradespeople oversupply jumped from 0.04 to 0.20 on the HIA Trade Availability Index, with an oversupply of labour being reported in nine out of 13 trades.
Worst hit are the areas of landscaping and plumbing, where the level of oversupply jumped from 0.29 and 0.20 respectively in the March quarter up to 0.50 in June.
Trades such as electrical (0.33), plumbing (0.33) site preparation (0.25) ‘other’ trades (0.24), general building (0.21) and carpentry (0.20) were all in significant oversupply, whereas painting (0.17) and joinery (0.10) are in moderate oversupply.
Meanwhile, a moderate undersupply of tradespeople in bricklaying (-0.13) and roofing (-0.10) means that workers in these categories continue to enjoy reasonably buoyant market conditions.
Housing Industry Association (HIA) chief economist Harley Dale puts the latest figures down to the soft conditions in residential construction.
Dale says now is a great time for new home buyers to enter the market. He says governments have a role to play not only in bringing about reforms to boost housing activity, but also in boosting skills in the sector.
“Tens of thousands of tradespeople are feeling the pressure of persistently weak residential building activity, while the loss of skilled labour to the resources sector will intensify the longer recessionary conditions persist,” Dale says. “Governments have a crucial role to play in delivering investment and reform to boost housing activity. Furthermore, now is the time, during cyclical weakness, for policy makers to accelerate reform and investment in skills and training to avoid labour re-emerging as a constraint on a future housing recovery.”
He added that current overall economic conditions make it an ideal time for property owners to build or renovate a home given the lowered interest rate, competitiveness in the building market and the ready availability of labour in many of the skilled trades.