The construction sector in Australia faces a looming skills crisis and is graduating only just over one third of the apprentices it needs to meet anticipated future needs, a leading building industry lobby group says.

New data from the National Centre for Vocational Educational Research shows that the total number of apprentices in training within the building and construction industry fell from 56,000 as at June 2013 to 43,100 as at June 2014 and had declined by 23 percent since 2010.

Master Builders Australia chief executive officer Wilhelm Harnisch said the research highlighted that the current training system was failing to meet the needs of industry and that current apprenticeship completion rates of between 11,100 and 14,500 per year were barely more than a third of what was needed just to replace retiring workers.

“This is a dramatic drop for an industry that will be one of the growth sectors in the economy and with an annual exit rate of 30,000 construction workers each year due to retirement,” Harnisch said, referring to the aforementioned fall in apprentice numbers in the system and adding that the sector will become increasingly reliant upon foreign labour if insufficient numbers of new trainees come though.

“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 figures come amid growing concern about the capacity of the industry to meet forward demand as building activity picks up.

Current estimates from the Department of Employment suggest the sector will need around 83,500 more workers between now and November 2018, with particularly strong demand in occupations such as plastering, floor finishing, wall and floor tiling and bricklaying and stonemasonry.

Already, recent builders’ surveys suggest skills are becoming more difficult to find in a number of areas – albeit with few immediate signs of drastic shortages emerging in the immediate term.

Harnisch noted new approaches to enhance apprenticeship pathways are needed along with a more flexible industrial relations system.

“The challenge is to reform the apprenticeship system to ensure our young people have the opportunity to be part of the future of building and construction,” he said. “To achieve this, new thinking is required to enable the industry and education providers to enhance pathways from school to apprenticeships and into rewarding careers in the industry.”

The latest data for construction comes amid a concerning drop in apprenticeship numbers generally, with the 45,400 commencements which took place in the June quarter being down by roughly a quarter compared to the same period last year and far lower than at any other time in the past five years.