Is Australia Heading for a Construction Trade Shortage? 8

Wednesday, August 26th, 2015
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Around Australia, concern is growing about a long-term shortage of skilled construction tradespeople amid fears not enough apprentices are being trained to replace retiring workers and meet growth in demand for new labour.

A quick look at the data seems to bear these fears out. Over the five years from December 2014 to November 2019, the Department of Employment expects the nation to need an extra 47,800 building tradespeople to take overall numbers from 365,900 to 413,600.

Reliable data on the age profile of the sector’s workforce is difficult to come by, but ABS figures from 2010 indicated that roughly 14 per cent of all current tradespeople are aged 55 or over, which would indicate that roughly 51,000 of the 365,900 currently employed in construction trades would be aged over 55. Assuming between one-third and half of these retire over the next five years, the nation will need an extra 17,000 to 26,000 new apprentices or thereabouts simply to replace those who retire.

This means in order to meet projected new demand and replace those who retire, Australia would need some 67,000 to 76,000 new trainees completing their apprenticeship, or 13,000 to 15,000 per year. That’s just to meet new demand and replace retiring workers – it does not take into account the need to replace those who move into management roles or otherwise leave the building trades to pursue alternative options. Given that over the last five years, only 61,600 (or an average of 12,325 per year) completed their apprenticeships, there does appear to be a shortfall. With the Department saying a number of construction trades are already in shortage (such as bricklaying, stonemasonry, roof tiling, wall and floor tiling, plumbing and cabinet making,) these numbers are concerning.

What’s more, those annual apprenticeship completion numbers – though above the 8,000 or so that completed their training in 2003 – are well down on the 30,000 completions witnessed per annum during the early 1990s.

Potential consequences are not difficult to understand. As well as pushing up wages and trade prices – adding to housing affordability woes and the cost of building necessary infrastructure – a shortage of locally trained skilled workers could lead to greater reliance upon foreign labour as well as compromises within the built environment due to a shortage of people who possess the knowledge, skill and expertise to perform critical tasks properly and safely.

Though opinions regarding causes and solutions vary, most commentators agree on the need to both encourage more people into training (and employers to offer training) and boost apprenticeship completion rates, which currently stand at around 50 per cent.

Richard Hayes, director of the Manufacturing, Engineering and Electrotechnology Faculty of TAFE NSW, says the problem has a number of causes. As the nation seeks to develop a ‘smarter’ economy, more young people are being encouraged to go to university rather than enter trades, he says. Meanwhile, the removal of quotas for universities has encouraged more people to go through that system rather than TAFE, while the raising of the school leaving age to 17 in several states has seen the age at which people can qualify and start earning decent money through a trade increase.

construction trade

Hayes says negative perceptions about trades are misplaced, and that indeed, trades offer many opportunities for a rewarding career.

“The perception is that every parent wants their child coming through high school to go on and get a degree and be successful,” he said. “But I think success can be measured in different ways and does not always have to be measured through a degree. More and more, we are seeing that young people coming into trades are going on to successful careers. That doesn’t have to be just banging nails in, they go on to management of building companies and contractors, and will manage large organisations and lead large teams of people.

“That can be very rewarding for them personally, but also financially as well.”

However, Construction, Forestry, Mining and Energy Union National Secretary Dave Noonan says the problem is not one of attracting people into apprenticeships but rather a lack of apprenticeships on offer and issues with high rates of non-completion of apprenticeship training. Noonan says a less obvious part of the completion side of the problem revolves around third and fourth-year apprentices being poached by other employers offering to pay them trade rates even though they have not completed their apprenticeship. He says one strategy which the union has advocated to prevent this from happening revolves around a requirement to be licensed or registered in order to practice a trade.

“There seems to be a misconception that young people are not attracted to apprenticeships,” he said. “This is incorrect. Demand to take up an apprenticeship far exceeds the number of apprenticeships on offer.”

Though Noonan does not support the notion of a looming skills crisis, he suggests there could be cyclical and regionally based shortages of bricklayers and carpenters in some areas, while the aging nature of the workforce will see the possibility of a shortage of plant operators and crane drivers.

Along with licensing and registration, Noonan would like to see stronger procurement policies requiring a proportion of people undergoing training on government-funded projects.

Hayes, meanwhile, would like to see a reconsideration of the increase in school leaving age (at least as far as allowing people to move into trades training is concerned) along with opportunities for young people to experience a given trade for a brief period prior to signing up to an apprenticeship commitment. This move, he says, would help avoid a situation in which young Australians commence training and then find they are either not suited to trades or better suited to a different trade.

We may not be facing a crisis, but Australia does need more people coming through and completing trade based apprenticeships.

That may mean promoting greater awareness of opportunities available through trades, encouraging the creation of more apprenticeship opportunities and supporting and encouraging more apprentices to complete their training.

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  1. Mark

    There are lots of possible apprentices out there (including my son loking for an electrician apprenticeship in Melbourne) but employers all want experience – in other words for "somebody else" to train them up so they can then poach trained workers.

    If the industry (and unions) were really concened about the lack of skills they would be proactively facilitating new 1st year apprenticeships instead of leaving it to the Government.

  2. David Chandler

    Australian construction has a skills shortage. Its at every level and involves management and the workforce. A sausage machine approach that skill based education has been reduced to in universities, technical colleges and through private training organisations is symptomatic of a lack of education commitment at all levels of government and industry. For most the curriculum is stuck in the past as recently reported in ABC journalist Michael Brissenden's interview with the Foundation for Australia's Rachel Brown. Brown said that 60% of students are training for occupations that will not exist in the future. Brown said "today's 12 year olds won't have the same opportunities to get a start in the workforce, yet they are still studying the same curriculum". Construction is not immune. Construction will be different and so will construction work packaging and jobs. Why would you ask Dave Noonan? The CFMEU is locked into the same old ideological warfare as as it has been for 200 years. That's why his membership is on the slide. Equally alarming is reported concentrations of ethnic diversity in schools which limits language, culture and eventually global market careers. Time to rethink.

  3. Les Williams

    I have no doubt the statistics quoted or the assertions made are accurate. The reality is that the majority of labour, machinery and materials are provided to the construction industry by subcontractors or industry small business and their suppliers. How many of these small businesses who employ these tradespeople are being forced from the industry. Most of these small businesses are trades people — either forced into insolvency because of unconscionable conduct by large construction companies or simply walking away from the industry that our conflicted legislators refuse to protect. Lets deal with the reality first; we must have industry to attract them in the first place.

    The industry is beset with corporate criminals attracted by the huge amounts of unsecured money earned by the sweat of the very people you are referring to. Why would the construction industry attract them?

    The corporate world has the Corporations Act and consumers have the Competition & Consumer Act 2010 but there is no commonwealth or federal legislation to provide minimum standards for an industry controlled by piecemeal state legislation that is influenced by self serving peak industry bodies

    • johnBerben

      Spot on Les,
      The small business enterprise has virtually no protection against large construction companies,
      The same companies that scream "skill shortages" or should it be "cheap labour shortage
      always find ways to screw you over,

  4. Jason B

    Has anyone ever mentioned what really goes on in a workshop for apprentices? sweeping floors, getting lunches, making coffees for the boss, being verbally abused, sexual harassment, constant threats of being sacked, made to work overtime and weekends without pay. its little wonder young people don't serve out a 4 year system of slavery and abuse. Then check the wages for many tradies – the award wage for a mechanic or plumber is like only $22. as of 2015 (and trades require 4 years on the job plus TAFE courses & exams plus licensing requirements) now compare the wage to an unskilled worker in the retail sector earning $25. an hour with no real training required, so where is the incentive to sacrifice 4 of the best years of your life without money incentives in place? Apprenticeships are scam and having trade papers means you have been conned! I would encourage people to either UNI or the dole before engaging in failed system of training.

  5. Andy

    Major roof tilers Shortage in Sydney Boom began to hit Sept 2015 now Feb 2016 after major wet weather impacts. The Construction Industry in Sydney is struggling to keep up growth due to lack of trades in many areas….but like the Brick Layers Shortage, Roof Tiling is really now a major delay that holds up other trades internally….

  6. Danny

    You all have valid points and it all is saying the same thing that has been said in the industry for a number of years ,not only is a trade looked upon as a lower end of the education chain but the creation of large project builders fixing prices that trades are paid is not helping at all ,the industry as a whole needs to go back to basics and start again when I did my apprentiship in the late 80s building wasn't stressfull and the quality of what we built puts today's buildings to shame what I see every day and have seen for the last 10 + years has been progressively getting worse,something needs to be done now