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Australia's Newest Construction Boom Driven by Infrastructure


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A month ago, it was estimated that engineering construction was up by 1.5 per cent in the quarter. Engineering work done for the public sector rose by 6.3 per cent in the March quarter. In fact, a record $35.8 billion of work was done for the public sector over the year to March.

“The first construction boom was driven by the resource sector—with more mining and energy capacity created to meet global demand, especially China. The new construction boom is not mines or oil platforms but roads, railways, dams and electricity generation and distribution facilities,” said CBA’s Chief Economist Craig James.  

"The new construction boom is not mines or oil platforms but roads, railways, dams and electricity generation and distribution facilities."

“And the centre of activity is no longer Western Australia, Northern Territory and northern Queensland, but rather the growing population centres of South East Australia.”

The March quarter has shown engineering construction work rose by 2.8 per cent to stand 13.7 per cent higher than a year ago, according to the Australian Bureau of Statistics and CommSec data. 

CommSec highlighted the growing shortage of skilled labour caused by the pressure to find skilled workers and tradespeople across multiple areas of construction—homes, commercial buildings, and infrastructure. It also predicted that more workers would be needed from overseas.

This view was echoed to some extent by Austin Blackburne, Victorian Regional Director, Construction from recruitment firm Hayes, who spoke exclusively to Jobsite.

“There is a definite lack of local labour, with some visa restrictions for overseas workers. However, we are seeing a growth in the number of tourists on working holiday visas who are willing to do labour, even though they would have considered bar work or waiting tables once. It is great money compared to the rates in Europe or even New Zealand.”

Blackburne believes the construction boom has been coming for a while and is not going to decline anytime soon. 

Blackburne believes the construction boom has been coming for a while and is not going to decline anytime soon. 

“In the last six months, we have seen a trend shift away from residential housing towards infrastructure, major commercial, and large-scale multi-faceted projects,” Blackburne said. “There is also huge growth in rail projects.

“There are multiple large-scale hotel projects across Melbourne and Sydney, each valued at around $900m plus, where we used to only have around one per capital city.”

He believes the growth in construction is partially attributable to election promises at State and Federal elections.

“The infrastructure promised in past elections is now getting underway. There are forthcoming elections in NSW and at a Federal level, resulting in numerous new projects being announced. These will take at least five years to complete.”

Blackburne also believes that while ever the housing market is healthy, despite recent declines, there’s still money for further developments.

“The projects promised by governments come from the revenue generated from stamp duty, and while the property market is relatively stable, it’s hard to see construction going south.”  

“I think we are in a new era,” he said. “ This is the ‘new mining boom’ if you will.”

In terms of construction jobs that Blackburne has identified as desperately needed, he cites contract administration as an area of substantial shortfall.

“I think we are in a new era,” he said. “ This is the ‘new mining boom’ if you will.”

“Contract Administrators are worth their weight in gold. There’s a real shortage of them, and I must get asked by huge projects each week to find them. Most people want to become project managers, but there’s a huge skill in being able to administer the multiple contracts on some of these huge projects, and the industry is desperate for them.”

“Skilled tradespeople are also in demand, especially those in the rail space. A lot of the work is regional, and it is difficult to find people who want to travel—nevertheless, there’s a whole lot of new rail projects underway, so they are also much sought after,” he said.

The shortfall in skilled labour has not gone unnoticed by the NSW Government, which last month announced free apprenticeships for trades from July 1.  

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