Over 150,000 tradespeople will be needed over the next 15 years if New South Wales (NSW) is to become a construction powerhouse capable of helping battle the nation’s housing shortage.
The Insight Centre report, Capitalising on the Next Construction Boom, found Australia’s most populous state had over $79.2 billion (US$50.9 billion) in construction projects this year, up from $75.5 billion in 2019.
However, the industry with the power to put roofs over heads is subject to optimal economic conditions, a headache for stakeholders.
In May, Master Builders Australia warned that data from the Australian Bureau of Statistics revealed a rise in inflation and decreased productivity in the sector.
The data painted a bleak picture: an April increase in the annual inflation rate to 3.6 percent, coupled with a loss of productivity across all construction sectors and a March quarter fall in output.
At the same time, demand for homes continued to soar.
Master Builders Australia’s chief economist, Shane Garrett, said government policy had to be developed to help negate the industry’s challenges, and a lack of workers was at the heart of the issue.
“Labour shortages are the biggest constraint on building and construction activity, and we are also facing unfavourable changes on the industrial relations front as well as a new wave of regulation,” he said.
“The building and construction industry is the canary down the economic coal mine,” Master Builders’ CEO Denita Wawn warned.
“When the industry is strong, the economy is strong. These figures should be sounding alarm bells for Australian governments of what’s to come.”
Incolink, the construction industry’s redundancy fund, claims NSW is on the precipice of a building boom, the single biggest one in a generation.
“This is a huge growth sector but it also has the highest proportion of workers who have lost a job in the past 12 months as a result of redundancy,” CEO Erik Locke said.
“Getting better support to these workers to address the financial and wellbeing challenges should be a major priority to keep workers in the sector.”
High redundancy rates, mental health issues, and skills shortages were among the reasons workers were absent from the industry.
With 300,000 workers currently in construction, the report said 450,000 would be needed in the next 15 years.
The total value of work is set to soar to a massive $114 billion before inflation by 2040.
NSW also has a role in building another 377,000 houses as part of the National Housing Accord to tackle housing shortages.
The Master Builders Association’s pre-budget submission said Australia’s more expansive building and construction sector would need 500,000 workers to maintain business as usual, with even more required to hit the housing targets.
Last month, a joint project between the University of New South Wales, the Regional Australia Institute, and other stakeholders explored how a skilled refugee workforce could address the nation’s labour needs.
In May, the federal government also announced a $90.6 million boost to help increase skilled labour in the sector, including the provision of fee-free TAFE college courses and support for pre-apprenticeships.
