Employment in Australia’s construction industry has reached new record levels, the latest data shows.

Published by the Australian Bureau of Statistics, detailed quarterly labour force data shows that the seasonally adjusted number of people who work in construction increased by 36,600 or 2.7 percent to go from 1.324 million in February to reach a new record 1.361 million in May.

At this level, construction employment is up by 51,100 or 3.9 percent compared with the previous corresponding period in May last year.

The ABS report comes as vacancy data from Jobs and Skills Australia indicates that hiring activity remains at historically elevated levels despite having eased back over the past twelve months.

Job vacancies for construction managers, engineers, construction tradespeople and construction labourers remain well above levels that were seen prior to COVID (see chart).

In addition to the immediate strength of the construction jobs market, the ABS data highlights two encouraging longer-term trends.

First, the data highlights the growth of employment in the sector.

All up, construction industry employment has risen by 16 percent or 188,000 people over the five years to May.

Over the past twenty years, construction employment has increased by 572,600 people or 72.6 percent.

Beyond that, the sector is making inroads in attracting and retaining more women into its workforce.

Over the ten years to May, the ratio of men to women who are employed in the industry contracted from 7.9 to 1 in May 2014 to 6.3 to 1 in May 2024.

As a result, female participation in the industry’s workforce increased from 11 percent to 14 percent over this period.

(Women now make up 14 percent of people employed in construction – up from 11 percent 10 years ago. Image source: NSW Government)

The latest data comes as Australia’s construction industry is going through an interesting period.

This is occurring as the volume of work has slowed in home building but continues to boom in civil construction as the industry works through a record pipeline of public sector infrastructure developments.

That infrastructure pipeline is creating shortages of skilled workers in occupations which are needed to deliver upon large and complex capital works.

As at August 2024, the Public Infrastructure Workforce Supply Dashboard indicates that Australia has a shortage of 182,600 workers who are needed in critical occupations to deliver on public sector projects.

Even in the more subdued residential sector, the most recent HIA Trades Report indicates that all housing construction trades remain in shortage (although the magnitude of that shortage is easing).

This is happening as the industry continues to work through a significant pipeline of projects that accrued during the recent boom in detached house construction and as residential and commercial building sectors are forced to compete for workers with the booming infrastructure sector.

Austin Blackburne, Technical Director at leading recruitment firm Hays ANZ, said that the strength in infrastructure work is creating significant demand for skilled employees.

This has led to hotspots of demand across several categories among both professional and trade/labour occupations.

In terms of professional roles, Blackburne says that shortages exist for architects, engineering managers and professionals, construction estimators, construction project managers, and construction riggers.

Not surprisingly, demand is being driven by infrastructure, which is absorbing labour and creating shortages across other industry sectors.

The higher rates of pay that infrastructure construction firms have awarded in order to attract the required labour resources has resulted in cost and margin pressures on projects, Blackburne said. This has increased demand for skilled commercial managers, estimators and contract administrators who are tasked with finding areas of cost-saving and improving efficiency in project delivery.

Regarding trades, Blackburne says that the massive infrastructure pipeline has created a flow on effect in manufacturing and has driven demand for technical and trades workers who are involved in the production of components and inputs that are used in infrastructure construction.

This is driving ongoing demand for workers such as diesel mechanics, boiler makers, fabricators.

“Current employment conditions in the AEC sector are complex,” Blackburne said.

“The government has invested heavily in infrastructure construction projects over recent years. Many of these projects, after years in planning, are only now becoming shovel ready. As a result, the infrastructure sector is absorbing labour resources, pushing up demand across the full spectrum of construction-related job roles. This has also resulted in wages being pushed up, with infrastructure construction companies paying higher rates to ensure that projects progress according to their contractual obligations.

“The increased demand from infrastructure construction has resulted in labour shortages across the traditional BAU (business-as-usual) AEC sectors, in particular residential building construction. Many operators have not been able to compete with the infrastructure sector in attracting labour, and we are seeing increasing levels of financial stress and insolvencies, particularly for SME businesses.”

Going forward, Blackburne says that infrastructure demand will remain at elevated levels over the next three to five years as a significant number of projects are only now entering their first stage.

Whilst conditions in the home building sector remain highly subdued, Blackburne expects that government policies will provide the sector with a much-needed incentive to increase housing starts.

Meanwhile, Blackburne says that several building firms are finding niche areas.

One example is six-month turnouts of high value commercial office space which are being undertaken in order to provide commercial tenants with better space and facilities in order to attract and retain talent.

Another is boutique projects in luxury apartments and townhouses that cater for cashed-up baby-boomers and Gen X-ers who are looking to retire.

Asked about strategies which candidates and firms can employ, Blackburne said that action is needed across several areas.

For employers, flexibility is important especially when trying to attract younger workers as well as females into the industry.

Also important is the workplace environment. With diesel mechanics, for example, better working conditions can be a more significant worker drawcard than the actual rate of pay. This might include clean workshops, background music, good OH&S conditions and structured job reviews.

Businesses that are adapting to these worker demands are more being successful in attracting and retaining talent, Blackburne says.

To attract and secure the best emerging industry professionals, meanwhile, construction firms need to get in early with initiatives to engage new university graduates. Also important are robust training and development programs which help to establish a longer-term career path.

Turning to candidates, Blackburne says that skills shortages are enabling quality workers to pick and choose between employers.

Whilst there is an understandable temptation to go for the highest-paying opportunities in light of cost-of-living pressures, Blackburne encourages candidates to also consider their longer-term career. This may involve looking for those employers with solid training and development programs as well as those who are able to provide future stability of employment.

Asked finally about the growing number of women in construction, Blackburne said that there is clear momentum in this area.

Much of this is being driven by government policy on public projects, Blackburne said.

He says that going forward, employers need to adopt strategies to increase the gender diversity of the workforce.

“There are more women being employed across the AEC sector, driven in part by the rolling out of government Building Equality Policies for the construction industry,” Blackburne said.

“In Victoria, for instance, building contractors must meet quotas for female representation by the end of 2025 to avoid penalties. For trade covered labour, women will be required to perform at least 3% of the total estimated hours of work on a project; for non-construction award covered labour, the quota is 7%; and for management/supervisory and specialist labour, the target is 35%.

“These policy initiatives are a positive step towards improving equality of gender representation in the industry. The challenge is for employers to implement strategies to make this a reality. There is much that needs to be done to improve construction site conditions to attract female workers – better facilities, and a welcoming culture. Initiatives such as providing childcare facilities and greater flexibility are also highly beneficial. We’re seeing that those businesses who have implemented such strategies are starting to see gains.”

“Longer term, increased visibility of female industry role models will be essential to attract current and future generations of women to the construction industry.”

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