Skills shortages have emerged as a key area of constraint which is holding back Australia’s construction sector, a survey has found.

Published by the Royal Institute of Chartered Surveyors (RICS), the Global Construction Monitor Survey provides an overview of current conditions and twelve month expectations in major construction markets around the world.

The report is based on a survey of 3,040 firms worldwide.

In terms of Australia the survey found that the broad construction market is easing back but remains generally buoyant overall.

All up, the Australian Construction Market Activity Index eased back from +13 in the September quarter to +10 in the December quarter.

The index measures current market conditions and twelve-month expectations across the construction sector for residential building workloads, commercial/non-residential building workloads, civil construction workloads and profit margins.

Index scores range from +100 to -100. Any score above 0.0 indicates a net positive result.

Not surprisingly, the index shows that activity is being driven forward by a record pipeline of major road and rail transport projects as well as a growing number of energy projects.

As a result, the index reading for infrastructure (+20) remains high notwithstanding that this has eased back from +29 in the September quarter.

Thus far, this is more than compensating for more subdued conditions in residential building activity (+2) and commercial/non-residential building activity (-3).

However, the survey also highlighted several areas which are acting as impediments to the construction sector.

Top of the list is a shortage of skills.

All up, 76 percent of survey respondents believed there was a shortage in quantity surveyors.

A further 70 percent cited a shortage of skilled tradespeople.

“Too much work for not enough people, major risk is adequately staffing these (projects),” one survey respondent from Brisbane remarked.

Another respondent from Perth noted that ‘there remains a shortage of skilled and semi-skilled blue collar works.’

Other listed impediments include costs associated with materials and finance costs associated with rising interest rates.

The latest survey comes amid growing concerns that Australia will not have the skills and manpower to deliver upon current short and long-term construction requirements.

As things stand, construction industry employment stands at record highs whilst data from Jobs and Skills Australia indicates that vacancies for construction managers, engineers and construction tradespeople and labourers are at elevated levels by historic standards.

During a recent interview with Sourceable, Adam Shapley, Managing Director of Technical at recruitment and workforce solutions specialist Hays, said that the market for hiring across the design and construction sector remained ‘very active’.

In particular, Shapley said there are shortages in the market for engineers, project managers in facilities management, fitout project managers, Revit drafters, project architects, infrastructure sustainability advisors, sustainable buildings engineers, electricians and diesel mechanics.

Going forward, there are concerns that the shortage of skills will intensify in the second half of the decade amid expectations of a strong rebound in housing activity, huge investments in clean energy, ongoing transport work and work on non-residential buildings such as hospitals and schools.

Despite the challenges, Kevin Brogan, Chair of the RICS Australasia board, said that overall construction market conditions remained steady.

“The Q4 2023 Global Construction Monitor indicates that overall global construction activity is strong and steady with the Construction Activity Index remaining at +10,” Brogan said.

“In Australia the picture remains much the same with a slight rebalancing reflecting the policy focus on housing.

“Importantly, skills shortages particularly for quantity surveyors remains an ongoing challenge for the industry with cost of material pressures easing slightly.

“The Q4 2023 Global Construction Monitor indicates that overall global construction activity is strong and steady with the Construction Activity Index remaining at +10.

“In Australia the picture remains much the same with a slight rebalancing reflecting the policy focus on housing.

“Importantly skills shortages particularly for quantity surveyors remains an ongoing challenge for the industry with cost of material pressures easing slightly.”