Critical labour shortages of skilled labour remains the biggest concern facing the construction industry, a nation-wide survey of builders and developers has found.
The building and construction industry platform BCI Central says 90 per cent of builders surveyed in their annual construction outlook cite labour shortages as the key challenge to their businesses. Measured from the third quarter of 2021. This is backed by calls for increased skilled professionals and migration to meet industry demands. Respondents to the survey said the federal government’s response to improving the visa process for skilled foreign workers had been slow.
Any changes to expedite skilled migration would be a key part of a comprehensive revaluation of Australia’s migration system, addressing the urgent need for reform.
The difficulty in finding skilled labour has led to increased pressure on salaries to retain talent within the industry.
There is an overall reduction in infrastructure spending, resulting in a decrease in industry workload and there is a shortage of subcontractors across various trades, hindering productivity and contributing to escalation. While the percentage of abandoned projects across all sectors in Australia is dropping, deferrals are on the increase.
The after-effects of the global pandemic continue to send shockwaves through Australia’s construction industry, disrupting and destabilising established norms.
Even major construction companies were facing inflation pressures, rising wages and interest rates and shortages of labour and materials, which were leading to increased costs. These challenges have resulted in progressively unprofitable contracts and, in some cases, have contributed to high-profile insolvencies
While the number of abandoned projects had begun declining in most states—except Victoria— deferred projects were on the increase. The steady rise in deferred projects is likely a result of increased construction costs putting pressure on project timelines.
The residential, commercial and hospitality sectors had all experienced higher abandonment rates than deferrals. The industrial, infrastructure and transport sectors, with the energy and resources sectors, made up more than 60 per cent of total project values..
That said, survey respondents wanted to see a greater emphasis on solving the country’s housing supply crisis.
“We need to dramatically increase the supply of a range of housing types that are well-located and affordably delivered. The best thing governments, including councils, can do to help achieve this is to fix the planning system. We need quick approvals and greater certainty. Decisions are slow and expensive and these costs either make projects unfeasible, so they don’t get built, or the costs get passed on to purchasers, making them more expensive.