Skills Crisis for 2015 Residential Construction 2

Tuesday, January 27th, 2015
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As we launch in to the new year, the strength of building approvals confirms the strongly positive outlook forecast in 2015.

Construction industry forecasts show growth of more than 12 per cent in the value of work done in the residential sector. The value of work done is predicted to be nearly $60 billion in 2014/15.

In some markets such as NSW, residential growth is expected to reach unprecedented highs in 2015 with over a 17 per cent rise which is equal to a nearly $16.5 billion boost in the value of work done. Tasmania is another state where a rise of over 20 per cent (equal to around $683 million) is forecast.

Confidence in commercial building is also predicted to improve with Master Builders forecasting moderate growth over the next three years. In addition to this demand, the Department of Employment projects that demand for jobs in the industry will grow by 83,500 to November 2018.

The latest data released by the National Centre for Vocational Education Research (NCVER) highlights the apprenticeship system is not meeting the needs of industry.

The industry is not currently training enough apprentices to meet either current or future demand.

Unless there is a dramatic increase in the number of people in skills training, then the building and construction industry is heading for a skills crisis putting billions of dollars of investment at risk.

The latest NCVER statistics show that commencements have declined from 22,100 in 2010 to 17,200 in 2013 before an increase to 18,000 in 2014.

While the nearly five per cent increase in the numbers of young people starting an apprenticeship in 2014 is good news, it comes off an extremely low base and is way below industry requirements and belies the dramatic drop off in commencements of 18.5 per cent since 2010.

A similar picture is painted with apprentice completions ranging from 11,100 to 14,500 each year since 2010. While there has been a welcome 30.6 per cent increase in completions in 2014 it comes off a low base and is totally inadequate to meet the industry’s needs.

While we welcome the Government’s moves to remove red tape from the skilled migration system, Master Builders’ first priority is to train and employ Australians. A more flexible skilled migration system will not cost young Australians jobs as unions claim.

The skilled migration program is not about bringing in foreign labour at the expense of local workers. It is about allowing the building industry to better respond to current and forecast future demand where no appropriately skilled local labour is available.

Therefore, industry and Government need to work together to develop reform to ensure that the apprenticeship system better meets the needs of industry and young people.

The first stop in this process must be new thinking that enables the industry and education providers to enhance pathways from school to apprenticeships and into rewarding careers in the industry. This must be complemented by a more flexible industrial relations system.

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  1. Andrew Heaton

    It would be interesting to go back several decades and see how current numbers of apprenticeship commencements and subsequent completions compare with historic figures from say, the 1990s and 2000s and or not the number of apprentices coming through has been growing, staying the same or falling over the longer term. Unfortunately this is not possible using the NCVER data contained in its report as this only goes back a limited time (five years, by memory).

    More importantly, I wonder where the current system is falling down or whether there are multiple areas in which it is falling down. Certainly, the low proportions of apprentices who actually complete their apprenticeship (around 50 percent, off the top of my head) indicates that something is not working as well as it possibly could.

  2. David Chandler

    Successive Australian governments, industry and unions have shown a contemptuous attitude to the construction industry. Politically there is no upside for a politician to champion the industry. The industry is plagued with problems such as out of control unions who seem more intent on disruption that value adding. Unions want it all before any value or productivity is created. Investment in national construction standards is hamstrung by the territorial pursuits of state governments defending their sovereignty with this flowing into uncertain industry compliance and certification outcomes. Industry has made and won its case to dismantle national and public works capability to the detriment of this once core competency. And over 200,000 entities call themselves constructors with an average of fewer than 5 employees and fluid career prospects. Government expects to fall back on construction every time it wants to revive the economy but it has no plan for its future.
    While much needs to be done to lift industry capability at the trade level this challenge flows through to management and leadership.
    It really is time to address the sort of industry we want in 10 years.