While resource companies continue to reduce headcount, workers and subcontractors within the building segment of the construction sector continue to experience some of the best conditions ever as home building activity continues to smash record highs.
The latest data from the Australian Bureau of Statistics actually reveals a modest 1.02 per cent drop in overall employment levels within the construction sector from 1.052 billion to 1.041 billion in the three months to May, but employment within the sector remain extremely high by historic standards. A net of around 17,200 new jobs have been added over the past year and almost 60,000 over the past two years.
These overall data points, however, mask a diverging trend between the booming segment of the market in actual building and the declining segment of the market in civil construction.
While heavy and civil engineering has shed 15,200 workers over the past year (not seasonally adjusted) – or a whopping 15.5 per cent of its workforce – building has added 21,100 since May last year and 42,500 over the past two years, taking employment levels in this sector to their highest on record.
Most of the action has been in New South Wales, which has put on almost 30,000 new workers over the past two years. Western Australia, too, has added nearly 15,000 over the past 12 months amid a surge in home building activity notwithstanding the resource sector pullback.
Not surprisingly, the surge in jobs is being driven by the booming home building sector – especially in apartments and other multi-residential dwellings where building approval numbers in the first four months of this year are more than double those from the same period two years ago.
Tradespeople are reaping the benefits, with employment services web site Seek.com indicating that workers and subcontractors in areas such as areas such as gardening and landscaping, plumbing, building trades, carpentry and cabinet making and refrigeration and air conditioning are in top demand.
While this is a positive development overall, the strength of demand is continuing to place upward pressure on trade prices. This is good news for tradespeople and subcontractors, but it is not necessarily a welcome development for builders, developers and consumers.
In a recent report, Quantity Surveying outfit WT Partnerships indicated that significant pressure on trade availability was emerging in area such as formwork, partitions and linings, and mechanical services, with strong potential for trade price growth on all eastern seaboard markets.