A major construction industry forecasting body has warned of a looming shortage of tradespeople throughout Australia toward the middle of the current decade as the mining boom ends and demand shifts back to residential building.
In its latest forecasts released on Tuesday, the Australian Construction Industry Forum (ACIF) talks of a fragmented construction sector outlook in years to come, with the residential sector recovering in some states, engineering set to peak in 2014 (while remaining ‘most productive’ sector for next seven years) and commercial building conditions set to remain bleak.
The ACIF says, however, that despite a significant oversupply now, Australia may not have enough tradespeople to meet demand when the housing sector picks up as a result of the limited numbers of apprenticeships during the current building crisis.
“The changing demand patterns and work types in the industry will have a large effect on construction industry employment, with declining requirements for high skilled workers over the forecast period, with growing needs for tradespeople and low skilled workers,” the ACIF says. “The type of work available [over the past few years], with the majority being regional engineering construction rather than urban residential and non-residential building, has seen a reduction in the number of apprenticeships available, which will have long term impacts on the skills of the industry – a major concern.”
More broadly, ACIF executive director Peter Barda says the outlook regarding activity over the next decade varies significantly among sectors and geographic locations – although prospects remain gloomy for most.
“Depending upon work type and location, there is significant variability in how businesses are faring across the country,” Barda says. “The ACIF Forecasts show that many of the cycles of the past are gone. There is a new ‘normal’, and for many, it will be poor in comparison to previous buoyant times.”
How Each Sector Will Fare
The following is a point-form summary of how the ACIF sees the outlook across the residential, commercial and engineering sectors in coming years:
- Overall recovery will be fueled by growing population, changing demographics and the housing shortage
- Recovery will be strong in New South Wales, with $17 billion in residential work after a weak decade
- There will also be improvements in Western Australia and Queensland
- There will be a boom in Victoria but retreating/lowering of demand in Victoria and all other states
- New work will come mainly in units and town houses as higher density living continues to grow in popularity.
- Forecasts are pessimistic
- Demand for building and refurbishment of offices, schools, retail, health and industrial building is to remain flat as clients delay and cancel projects due in part to credit pressures
- The federal government stimulus effect is to peter out completely during 2013/14
- The sector is to experience decline in activity unless work found to pull it out of the ‘GFC-inspired’ slump
- Will peak in 2014 at a whopping $120 billion in output per year
- Some resource projects are being put on hold amid global uncertainty over demand for minerals
- Surprisingly high levels of work remain in water and sewerage
- Will continue to be the ‘most productive’ industry sector for the next seven years thanks to initiatives such as the Carbon Price Mechanism, National Broadband Network, and Renewable Energy Target scheme