Thanks to a weak housing market, tradespeople involved with residential construction in Victoria remain in moderate oversupply, with roofers, carpenters and painters the worst hit, the latest report shows.
But shortages in some areas have raised concerns about potential supply-side constraints when demand for housing picks up.
The HIA Trades Report December Quarter 2011, shows an overall moderate oversupply of tradespeople throughout the nation (see table below). In the December quarter, the HIA Trade Availability Index stood at 0.04 across all trades. Any reading above zero indicates an oversupply of the trade in question.
Worst hit was roofing, where the index registered 0.38 despite tradespeople in this area having been in short supply earlier last year. Also in oversupply were carpenters (0.16), painters (0.15) joiners (0.12), plasterers (0.09) and landscapers (0.08). By contrast, there was a significant shortage of electricians (-0.29), plumbers (-0.27) and bricklayers (0.21) and moderate shortages of ceramic tilers and ‘other trades’ (-0.8 each).
But shortages remain in some areas, with significant shortages of electricians (-0.29), plumbers (-0.27) and bricklayers (0.21) and moderate shortages of ceramic tilers and ‘other trades’ (-0.8 each). Also, the overall December quarter oversupply was less than half that recorded in June (0.10), with nine out of fifteen trades showing a tightening of supply during the last quarter (see table).
By region, a significant oversupply of tradespeople remains in Brisbane (0.41), regional Queensland (0.32) and regional New South Wales (0.20), with Perth (0.09) experiencing a moderate oversupply. By contrast, there are significant shortages in regional South Australia (-0.33), regional WA (-0.25), Melbourne (-0.19) and regional Victoria (-0.10). No shortages or oversupply were recorded in either Sydney or Adelaide.
Despite the overall oversupply, Housing Industry Association (HIA) chief economist Dr. Harley Dale warns that the shortage of skills in some trades will act as a supply side constraint to any increase in residential building activity.
“There are a multitude of supply-side constraints which if left unaddressed will hinder the prospects for a sizeable and sustainable recovery in residential building activity” Dale warns.
“A structural shortage of skilled residential tradespeople is clearly one of those constraints”.
HIA Executive Director, Industry Workforce Development, Liz Greenwood, agrees, saying that the lack of supply in some areas even when housing is weak raises concerns about what might happen when construction picks up again.
“Whilst it is encouraging to look back on some short term improvement in the overall supply of trades last year, it is still a concern to see that the availability of some of these trades remained consistently in the negative only improving, at best, to a break-even point” Greenwood says.
“Residential building activity in Australia has been subdued for quite some time now. What the Trades Report figures tell us is that when activity improves, existing trade shortages will again reach critical levels” she adds, “This is a concern for everyone, not just for industry”.