Australia could face a worker shortage of up to 105,000 people as well as significant shortages of plant, materials and equipment on public infrastructure projects over coming years as the nation embarks on a record program of major road and rail projects, a new report says.
In its latest report, Infrastructure Australia undertook detailed research to examine specific areas of potential capacity constraints which are likely to impact construction on Australia’s biggest-ever pipeline of investment in public infrastructure.
According to the report, the overall dollar value of work done on infrastructure projects throughout Australia is expected to double over the next three years and is expected to peak at $52 billion in calendar 2023. Most of this activity will centre around major road and rail projects in urban centres.
That, along with significant COVID-related supply-side constraints, will lead to challenges in securing materials and skilled labour on projects.
Indeed, according to the report:
- A 140 percent increase in demand for construction plant over the next three years may create difficulty in sourcing specialist equipment such as heavy cranes and tunnel boring machines.
- A 130 percent jump in demand for control equipment over the same period is likely to create difficulty in sourcing signalling systems for rail installations.
- A 120 percent increase in demand for construction materials across ten types of material which were analysed is likely to create challenges particularly in sourcing local materials such as quarry products, cement and concrete. In addition, there are concerns about availability of rail track – demand for which is expected to grow faster compared with that for any other material analysed and which is produced only at the Whyalla steelworks in South Australia.
- By mid-2023, the overall number of workers who are needed throughout the infrastructure sector is expected to reach 280,000 – up from 183,000 today. This will expose the sector to a potential shortfall of 105,000 workers by that time and will see demand for workers across the sector exceed supply by 48 percent. At the peak, up to one in three advertised roles could go unfulfilled.
- By this time, 34 of the 50 public infrastructure-related occupations which were identified in the report may potentially be in shortage. At an individual role, level, shortages may be experienced in up to 81 roles.
- In engineering alone, a potential shortage of 41,000 engineers across areas such as civil, structural, geotechnical, materials engineering and others is likely to emerge.
- Meanwhile, the biggest volatility is expected in civil and structural trades and labour as well as finishing trades and labour. Among these trades, painters, electricians and telecommunications workers will be in high demand whilst general labourers, concreters, bricklayers, carpenters, joiners and rail track workers will be hard to source.
In its report, IA said several measures are needed to address the situation.
- Active portfolio and pipeline management to smooth investment and manage resource constraints.
- Improved front-end engineering and design to avoid waste
- Increased collaboration with industry to support capacity and capability development.
- Embedding digital practices, including supporting definitions, systems and processes.
- Increased public sector capacity and capability to act as a model, mature client
The 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.
It represents the first phase of work in a program which Infrastructure Australia is undergoing to monitor and report on the capacity of the market to deliver major infrastructure projects.
The work follows this area having emerged as an important challenge in the organisation’s overall 2021 Australian Infrastructure Plan released last month.
A second phase of the program is now under development for publication in the first half of 2022.
Infrastructure Australia Chief Executive Romilly Madew said the report provides a level of visibility about the need for skills, labour and materials on public sector work which has not been available until now.
She says the report underscores the need for 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.
“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 …” Madew said.
“… This research further underscores the need for a coordinated project pipeline to manage capacity constraints and provide confidence and certainty for both industry and government. 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.
“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.”