Construction Wages Remain in Check

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Monday, August 19th, 2013
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Amid an environment of low building activity and weak labour demand, wage growth in the construction industry throughout Australia remains modest, the latest figures from the Australian Bureau of Statistics indicate.

Including overtime, the latest data shows the average full-time adult in the industry took home $1,637.50 each week in May this year – up slightly from $1,607.70 last November and $1,578.60 in May 2012.

Excluding overtime, ordinary wages edged up 1.22 per cent from $1,418.70 in November 2012 to $1,436.00 in May, though they are up 5.44 per cent when compared to May last year.

The latest figures further reinforce the subdued nature of construction industry labour market conditions amid low levels of building activity.

In its most recent estimate, the Australian Bureau of Statistics put the seasonally adjusted number of people employed in the industry throughout the three months to May at 1.004 million – the third lowest level on record in the past three years.

Furthermore, with previously red-hot demand for engineers on resource and infrastructure projects now diminshing at a time when demand for architects and building trades remains weak,  the impact of the challenging conditions is now being felt across almost the entire industry with the possible exception of a few locations such as Perth and Darwin.

The latest Clarius Skills Index report, for example, showed the engineering profession to be in surplus for the first time since 2009.

In the residential sector meanwhile, the most recent HIA Trades Report shows a national oversupply of skilled labour in 10 out of 13 trades, with landscaping, painting, roofing, joinery and site preparation being the worst hit areas.

Taken together with subdued increases in trade prices, the latest figures indicate that for now at least, labour cost pressures throughout the industry remain in check.

Still, there are fears upward pressure on wages and trade prices may start to emerge toward the middle of the decade as current low apprenticeship numbers feed through to a potential shortage of skilled tradespeople as building activity picks up.

Interestingly, the latest figures also show an apparent widening in the gap in gender based pay throughout the sector as pay rates for women in the industry declined 3.38 per cent over the six months to May as those for men rose 2.2 per cent.

Excluding overtime, the average woman in the construction industry throughout Australia now earns $1,145 per week – around 77.4 cents for every dollar earned by the average man ($1,478.60).

While it is possible this indicates a widening of the pay gap, it is also likely that the apparent fall-back in women’s pay relative to men could be partially explained either by natural statistical variation from one reading to the next or the relatively high prevalence of women in segments of the profession which are experiencing particularly weak demand, such as architecture.

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