Seven home building trades remain in shortfall throughout Australia despite the slowdown in residential construction overall, the latest report has revealed.
In the December quarter edition of its HIA Trades Report, Housing Industry Association (HIA) said the shortfall in trades relating to residential construction has eased but says a mild shortfall remains overall.
On a range between +2 and -2 where positive values indicate oversupply and negative values denote shortfall, the HIA Trade Availability Index stood at -0.10 in the December quarter.
Whilst this represents an improvement from the September quarter (-0.13) and the December quarter of 2018 (-0.20), it suggests that a moderate trade shortage in new home construction persists overall.
Of thirteen specific trades which HIA measures in its report, sever remain in shortfall.
These include bricklaying, ceramic tiling, roofing, plastering, carpentry, ‘other’ trades and joinery.
By contrast, there was a moderate oversupply electrical, general building, plumbing, painting, site preparation and landscaping.
By location (five largest states only), moderate trade shortfalls are evident across Regional SA, Sydney, Regional NSW, Melbourne, Regional Victoria and Brisbane.
A moderate oversupply of trades was evident in other measured areas.
The report also found that price increases remain in check across most trades.
Whilst trade rates for painting have surged by 8.3 percent over the past year and those for landscaping, plastering, bricklaying and general building have seen annual increases ranging from 4.2 percent to 4.7 percent, rate increases in other trades have been more modest.
The latest report comes as job vacancy data from the Federal Government indicates that the labour market for workers across some construction trades is softening.
The data – produced by the Department of Small Business and Jobs – finds that vacancies over the year to January declined from 223 to 161 in the case of carpenters and joiners and from 303 to 277 and 75 to 65 in the case of electricians and painting trade workers respectively.
The easing in the shortage of residential construction trades follows a pull-back in home building activity, which has seen the number of new dwellings approved for construction drop from 225,482 in calendar 2017 and 212,064 in calendar 2018 to 172,878 in calendar 2019.
HIA Economist Angela Lillicrap said warned of a looming shortage of trades in the next housing upcycle.
“As the next upcycle in home building commences, more construction work will enter the pipeline, albeit nowhere near the levels seen in the previous cycle,” Lillicrap said.
“This will see demand for skilled trades increase and put further pressure on the price of skilled labour.
“There is a risk that existing shortages in areas such as Sydney and regional New South Wales will be exacerbated.”