IA forecasts increased demand for skills, labour and materials
With major public infrastructure activity set to double over the next three years, a new Infrastructure Australia report warns of potential shortages in skills, labour and materials.
Infrastructure Australia’s first Infrastructure Market Capacity Report forecasts a surge in demand for resources due to the rapid increase in public infrastructure investment.
The report responds to a request from the Council of Australian Governments in March 2020 for Infrastructure Australia to regularly report on the capacity of the market to deliver on the record investment pipeline.
Its findings underscore the need for Australia’s governments and industry to work collaboratively to advance sector-wide reform and reduce the risk of cost escalation and delays in the delivery of major infrastructure projects.
Infrastructure Australia Chief Executive, Romilly Madew, said, “The Infrastructure Market Capacity report is an Australian-first and a new data capability for Infrastructure Australia.
“It provides a level of visibility of the major project pipeline and resulting demand for skills, labour and materials that governments have not had until now.
“Major public infrastructure activity will approximately double over the next three years, peaking at $52 billion in 2023.
“This record investment creates new opportunities for local business and employment, however also risks constraints in the capacity of the market to meet this growth in investment.
“In mid-2023 the employment in the infrastructure sector will need to grow from 183,000 people today to more than 288,000.
“Potential shortfall in jobs being filled is forecast to exceed 105,000, with one in three jobs advertised going unfilled. This presents an opportunity for further employment, but there is also a risk these roles will be unfilled.”
Key findings include:
- A forecast average annual growth rate of 33 per cent as industry reports reduced confidence in their capacity to deliver on-time and on-budget
- Industry indicates a high confidence of delivering 10-15 per cent annual growth, but a low confidence in delivering growth over 18 per cent
- Demand for plant, labour, equipment, and materials will be two-thirds higher than the previous five years
- Over the next three years it is expected there will be:
- 120 per cent average growth in demand for materials
- 125 per cent growth in demand for equipment
- 140 per cent growth in demand for plant
- The peak of demand for skills is 48 per cent higher than supply. Meeting this demand would require annual growth of 25 per cent over the next two years, which is more than eight times higher than the projected annual growth rate of 3.3 per cent.
- 34 of the 50 public infrastructure occupations identified are potentially in shortage
“While infrastructure investment is rightfully a key component of our national COVID-19 recovery, we need to ensure we are equipped to deliver this once-in-a-generation infrastructure spend,” Ms Madew said.
“The challenge of driving a step-change in infrastructure productivity and innovation is a shared one – it cannot be solved by governments or industry alone.”
Australasian Railway Association (ARA) Chief Executive Officer, Caroline Wilkie, said the reports were a welcome recognition of this critical issue.
Ms Wilkie said while looming skills shortages were complex to solve, an immediate focus on education and training to meet short and medium term needs would be an essential part of the solution.
“In 2023, skills demand will be 48 per cent higher than supply, with the transport infrastructure sector set to be in the eye of the storm,” Ms Wilkie said.
“This is the clearest indication yet that we must act now to ensure we are ready to meet the unprecedented investment and growth that is to come.”
Roads Australia (RA) CEO, Michael Kilgariff, said, “Today’s report supports key recommendations in RA’s September 2020 Procurement Reform Report, around long-term pipeline visibility, potential skills shortages and workforce culture issues.
“In particular, RA has called upon the Federal Government to play a leadership role in the development and coordination of a national infrastructure pipeline, in collaboration with other jurisdictions.
“This will help to produce a manageable flow of work and allow industry participants of all sizes to plan their activities more effectively.”
“Excessive work hours and fatigue have given rise to poor mental health outcomes in the construction industry. These negative factors make it difficult to attract and retain talented individuals from diverse backgrounds to pursue careers in construction.”
“To attract a sustainable workforce, we must ensure our people feel they can be innovative, experience personal safety, have opportunities for personal growth and feel included and valued.”
The inaugural report is focused on major public infrastructure pipeline (transport, utilities and building infrastructure), for investments over $50 million for Tasmania, Northern Territory, and the Australian Capital Territory and over $100 million for all other states.
The Infrastructure Market Capacity Report represents the first phase of work in Infrastructure Australia’s ongoing Market Capacity Program that will monitor and report on the capacity of the market.
A second phase of the Market Capacity Program is now under development for publication in the first half of 2022.
The post IA forecasts increased demand for skills, labour and materials appeared first on Infrastructure Magazine.