All major trades which are involved in detached home building throughout Australia are in shortfall, new data shows.
The Housing Industry Association has released its HIA Trades Report, which provides a quarterly review of the availability of skilled trades along with demand and supply pressures on trades that operate in residential construction.
Overall, the HIA Trade Index fell further during the June quarter to go from -0.90 in the March quarter to -0.92 in the June quarter. (The data ranges from a maximum of +2.00 to a minimum of -2.00. Any reading below 0.00 represents a trade shortage.)
At this level, the trade shortage is the worst on record since the report’s inception in 2003.
All trades are in shortage (refer table and chart). The most extreme shortages are evident in bricklaying, carpentry, roofing, other trades (concreting, floor sanding, building design, glazing, pest control etc.) and ceramic tiling.
Shortages are evident across all regions. Availability is particularly tight in Regional WA, Regional SA, Regional Vic and Regional NSW.
Not surprisingly, the shortages are feeding through into higher trade prices.
Across all trades, prices surged by 6.1 percent in the June quarter and have risen by 9.5 percent over the past twelve months.
This has been driven by surging prices for bricklaying, carpentry, painting, plastering and joinery (see chart).
The sharpest price increases are evident in regional SA and Melbourne. Over the past twelve months, prices in these localities have increased by 18.4 percent and 17.5 percent respectively.
The latest data comes amid ongoing evidence of cost and supply pressures which are evident throughout the home building sector.
In new data released on Friday, the Australian Bureau of Statistics reported that output prices for house construction increased by 19.8 percent over the year to June.
According to that report, the average price of materials which are used in home building have risen by 17.3 percent over the past year amid massive prices rises for steel, structural timber and other products (refer article).
The latest report also provides further evidence of the shortage of tradespeople and workers.
Released last week, data from the National Skills Commission indicated that job vacancies were at their highest June monthly level in sixteen years of record for carpenters and joiners, plumbers, electricians and several other trades.
HIA Economist Tom Devitt says the shortages are being driven by record levels of detached house construction activity along with constraints on access to skilled trades from overseas.
Whereas the situation with regard to materials was showing signs of easing, Devitt says the shortage of labour is likely to persist into 2023.
“As at March 2022, there were over 100,000 houses under construction across Australia, a record high and almost 80 per cent higher than pre-pandemic levels,” Devitt said.
“This elevated demand, and constraints in access to skilled trades from overseas, have resulted in this acute shortage of skilled trades.
“In recent months, we have seen improvements in several international and domestic supply chain indicators, including an easing in shipping container, oil and timber prices. Central banks around the world are also increasing interest rates to reduce demand and combat inflation, and households are shifting their spending back towards services like travel, entertainment and dining out.
“Labour constraints are proving more persistent. Job vacancies are at record highs in every industry and shortages of skilled trades are likely to persist into 2023, if COVID-related staff absences continue, and overseas workers only slowly return.”
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