Housing Comeback to Benefit All Construction Trades

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Wednesday, November 6th, 2013
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Tradespeople across almost all categories in residential construction throughout Australia are set to benefit from the recovery in home building activity, a key housing industry economist says.

Tradespeople across almost all categories in residential construction throughout Australia are set to benefit from the recovery in home building activity, a key housing industry economist says.

As figures last week showed both new home sales and residential building approvals at their highest levels in several years, Housing Industry Association chief economist Harley Dale says even though any areas of skilled labour shortages will be restricted to localised markets in the short term, tradespeople across almost all categories within the industry can look forward to a better year ahead.

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Housing Industry Association chief economist Harley Dale

“I guess the over-arching comment is that we would hope to see an increase in demand for skilled trades in 2014,” Dale said. “That in itself would be a positive thing because it would mean that what is still quite a fledgling recovery in new home building was probably gathering legs at the same time as you were starting to see an improving number of medium large scale renovation jobs hit the actual construction stage.”

Dale said the effect of the recent upturn in housing starts will initially be most evident in areas such as carpentry, bricklaying and general building, and will then flow through to finishing trades such as painting and plastering, with the improvement in these areas gaining further more momentum if a geographically broader recovery takes hold.

“But at the same time, from a starting point of a 10-year low, if you are seeing renovations recover and say if you are seeing say an increase in kitchen and bathroom renovation jobs as well as installations and structural renovation jobs where people might be knocking out a wall and extending the back of a living room and things like that, that would generate its own momentum as well. And of course in cases of bathroom and kitchen renovations and the like then you will see some recovery in joinery for example and ceramic tiling,” he said.

“So you could foresee a situation where if in late 2014, looking at a situation where new home building is still recovering and renovations is coming along behind it, you would expect to see a broad-based recovery in demand across all trades.”

Dale’s comments follow the release earlier this week of the September quarter HIA Trades report, which showed the overall level of employment in skilled trades moderating and four trades – roofing, bricklaying, plastering and landscaping – returning to a situation of shortage rather than oversupply.

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His comments also come amid increasing concern within the broader construction industry about a potential shortage of skilled labour as building activity picks up in coming years amid an environment which saw lower numbers of apprentices coming through in recent years and tough building conditions.

Dale says in the short term, any areas of shortage will most likely be geographically focused rather than spread across the country. He acknowledges, however, that concerns in this area may apply to the broader industry over the longer term if the aggregate level of home building returns to anywhere near the levels required  in order to meet national housing requirements.

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Asked about the prospect of tradespeople shifting between states (for example, from Victoria to New South Wales) in response to shifting demand patterns, Dale says there is every likelihood this may happen but how much of an effect this might have is difficult to predict.

“There always is some labour migration when you have geographical disparities in construction so there’s no reason to expect you are not going to see some of that migration in this cycle the same as we’ve always seen in previous cycles” he said. “I wouldn’t be surprised to see some migration, but that having been said it depends on people’s circumstances. If people are well established in a particular area then the costs to them uprooting themselves and moving to a different state are higher.”

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