Construction Job Vacancies Near Two-Year Low

Friday, October 4th, 2013
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Despite signs of a modest recovery in home building in some states and high levels of activity in resource investment, the construction industry’s labour market in Australia remains weak with the latest figures showing job vacancies in the industry near two-year lows.

According to the most recent ABS data, the overall number of job vacancies throughout the construction industry in Australia dropped from 16,500 in May to 12,800 at the end of August.

That marked the second lowest figure on record since November 2009 and stood at just over half the 23,900 vacancies recorded at the peak of activity in the August quarter of 2011.

Compared with the same quarter in 2012, vacancies within the industry are down 23.8 per cent.

While contrasting with recent figures showing employment in the industry at its highest level on record amid extremely strong levels of activity for the time being in civil construction in Western Australia and the Northern Territory, the figure coincides with a range of other indicators showing subdued demand for labour across most of the industry.

In the residential sector, for instance, the most recent HIA Trades report shows an oversupply in 10 out of 13 trades, with landscaping, painting, joinery, roofing and site preparation among the worst hit areas.

Surveys from Master Builders Australia, meanwhile, indicate that both technical and on-site managerial skills have become less difficult to source in recent times.

Moreover, the near-term outlook is not encouraging. Expectations of forward staffing levels as per the Master Builders survey remain in negative territory while forecasts from the Australian Construction Industry Forum put the average number of people likely to be employed throughout the industry at 1.007 million – well down from the 1.044 million the ABS estimates were employed throughout the sector in the three months to August.

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Housing Industry Association chief economist Harley Dale says a strong vacancy showing in New South Wales was encouraging and was consistent with a recovery in residential activity along with an increase in non-residential activity in that state.

“But elsewhere, it’s not telling a particularly strong story is it?,” Dale says, referring to the latest figures.

“And given that non-residential construction peaked last year and is coming off and residential construction is still recovering in a patchy way that is not universal across the country or across segments of the market, I don’t think it is surprising that there are more negative signs in front of vacancy rates than there are positive signs.”

Asked about the outlook going forward, Dale is not optimistic, saying that, though there are disparities across sectors and geographical regions, overall levels of activity across the industry are set to ease back – the impact of which will flow through to the sector’s labour market.

The vacancy figures come amid increasing signs of modest improvement in the residential sector, with new home sales in August reaching their second highest level in almost two years and building approvals falling but remaining high compared to levels seen over the past 12 months.

Economists are sceptical, however, about the prospect of any residential sector upturn being of sufficient magnitude in order to fully absorb the slack as resource construction work drops back in coming years.

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