Construction Employment Surges to Record Highs

Wednesday, January 7th, 2015
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Even as the general economy slows, employment levels within the construction industry in Australia have soared to record highs.

On a seasonally adjusted basis, the overall number of people employed throughout the sector in the three months to November rose by 6,600 (0.63 per cent) from 1.048 million to 1.0546 million – 58,700 more than the same period last year and accounting for almost one in every 10 Australians employed across the economy.

New South Wales led the way followed by Western Australia, with the former adding 22,800 workers over the three months (not seasonally adjusted) or 65,400 compared with the corresponding period in 2013 and the latter adding 5,800 or 5,700 year-on-year.

Employment also rose on a year-on-year basis in Tasmania, the Northern Territory and the Australian Capital Territory, but contracted in other states.

Housing Industry Association economist Geordan Murray said the latest numbers reflected strong levels of home building activity and that the market was tightening especially in NSW and WA for skill sets in areas which are heavily exposed to the residential side of the industry such as bricklaying, tiling, plastering, carpentry and roofing.

He said going forward, tradespeople in such areas would continue to experience strong conditions in 2015 as buoyant levels of housing activity continue but workers exposed to the resource sector would see demand for their services in that area drop back. Murray added that the capacity of the residential sector to meet its labour requirements would depend largely on the extent to which those coming off the mines were willing and able to transition onto residential sites.

“If you look at the forecast of activity over 2015, we are expecting mining investment to come off and residential is predicted to continue to be strong,” he said. “So all those trades that are utilised in residential construction should do quite well, particularly in markets where residential building activity is performing well.”

The latest data comes amid ongoing debate surrounding the 457 visa program and concern about the low number of apprentices coming through the system.

While building industry lobby groups consider the foreign worker program essential for meeting demand in areas of skills shortages, unions see it as rife with abuse and are calling on members of the Senate’s legal and constitutional affairs committee to hold an inquiry into the system.

construction employment

Meanwhile, Master Builders Australia chief executive officer Wilhelm Harnisch says the sector is facing a looming ‘skills crisis’ as around 30,000 workers retire from the sector each year but the number of apprentices coming through to replace these has been less than half that in recent years.

Murray says a challenge for government’s at all levels was to lift productivity, and that all governments should look at ways to do this including by cutting regulation or reforming taxes.

Construction Sector Employment at a Glance

According to the ABS, during the three months ending November:

  • Around 1.054 million people were employed either full time or part time within the construction sector (seasonally adjusted) – up 6,600 from the previous three months and 58,700 from the same period one year earlier
  • The sector accounted for 10 per cent of all workers employed across the economy
  • By state, New South Wales was the biggest employer followed by Queensland, Victoria and Western Australia, with the aforementioned states accounting for 33.3, 21.6, 19.5 and 14.9 per cent of total employment respectively
  • Around 86 per cent of those employed within the industry worked full-time
  • Men outnumbered women within the sector by a factor of 8.336 to one
  • Around 61,900 people in the sector were unemployed, giving an implied unemployment rate for the sector of 5.86 per cent
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