The construction industry in Australia has gained more than 43,500 jobs over the past 12 months as the benefits of higher levels of home building activity flow through to the sector’s workforce and moderate skills shortages begin to emerge in some trades.

On a seasonally adjusted basis, data from the Australian Bureau of Statistics shows that the industry added 3,488 net full time and part time jobs in the three months to May and has gained more than 43,544 (net) workers and contractors in the past year, taking the overall number of people employed throughout the industry (seasonally adjusted) to slightly more than 1.029 billion – the second highest level reached since detailed ABS employment records began in November 1984.

Leading the way is New South Wales, where a recovery in Sydney has seen the industry put on 47,200 staff over the past 12 months. Labour markets in other states, meanwhile, have mostly held relatively steady over the past year.

Housing Industry Association (HIA) senior economist Shane Garrett welcomed the latest figures, noting that more full time positions were now being created in contrast to significant numbers of part-time job gains during earlier stages of the building recovery.

“It (the ABS data) shows that the strong growth that we saw in housing activity in the first quarter is having a real effect on the labour market, which is encouraging,” he said. “The composition of that is also encouraging because full time jobs have started resuming growth in creation again.”

Construction Jobs Australia

While generally seen as a positive, however, the latest data also serves to reinforce concerns about the available supply of skilled tradespeople going forward amid expectations of continued strength in residential construction and a moderate uptick in commercial building. There are also low numbers of trainees coming  through after apprentice numbers fell during the recent building downturn.

Last month’s HIA Trades Report showed a moderate shortage of supply in six trades and significant upward price pressures for bricklaying and site preparation services, albeit with the overall demand for/supply of trades remaining roughly in balance and trade prices generally remaining in check.

Garrett said supply is tightest in trades which are predominately exposed to residential building and were not substantially impacted by mining activity. These include areas such as bricklaying, ceramic tiling, roofing and carpentry.

He warns, however, that the market is being impacted not only by strong demand but also the low numbers of apprentices coming through as well as a recent tightening of restrictions upon use of foreign workers, adding that HIA is calling for appropriate policy measures to ensure an adequate supply of skilled tradespeople going forward.

Still, he expects general wage and trade price levels to remain in check over the foreseeable future, albeit with some moderate price pressures possibly emerging in some areas of the market.

“The trade prices in trades that have experienced shortages have increased and the (HIA) Trade Report shows that,” he said. “On the other hand, inflation in the overall economy is quite contained especially in terms of things such as wages. Interest rates are also very low.

“Both of these factors will tend to keep wage inflation in the construction business in check to some degree.”

The latest numbers follow HIA’s latest quarterly housing forecasts, in which it said it expects the number of dwelling unit commencements taking place throughout Australia to reach 180,000 in 2014 – the second highest level on record.

Key Facts:

  • Before seasonal adjustments, the overall number of people employed throughout the construction industry in Australia during the three months to May stood at 1.033 billion (1.029 billion after seasonal adjustments).
  • Of these:
    • 658,400 were employed in Construction Services, 248,600 in Building Construction and 86,100 in Civil/Engineering Construction, while a further 39,900 did not fit any of the aforementioned categories
    • 916,853 were men and 116,179 were women, meaning women account for around 12.7 per cent of the industry’s workforce
    • 884,100 were employed full time; 148,900 part time.
  • Around 38,900 construction workers are unemployed, with 30,100 having lost their last job and 8,700 having left their last job voluntarily
  • Around 64,100 employed workers in the industry, or 6.2 per cent of the employed workforce, are classed as ‘underemployed

'Trade Supply'