Tasmania is set to face a significant shortage of building workers over the next twelve to eighteen months amid an unprecedented volume of work and will need to import workers from other states, a leader in the state’s construction sector says.
In a recent interview, Master Builders Association of Tasmania Executive Director Michael Kerschbaum told Sourceable that the market had strengthened in recent times as work had lifted, and that shortages of labour and trades were likely as a number of major projects started up within a short space of time.
“From our point of view, the labour market is tightening, especially in the commercial sector,” Kerschbaum said. “It’s probably at the point of reaching capacity now, especially in some areas, it is slightly over capacity. But in general terms, it’s very stretched at the moment.”
“We only expect that to get worse as the course of the year unfolds. We do expect activity levels to increase and we do actually expect that by the end of this year we will be able to be well and truly in deficit in terms of our ability to meet our labour demands.”
Around Tasmania, conditions within the commercial segment of the construction sector have improved as the volume of work in the near-term pipeline has grown.
Foundation work on the first of two new blocks as part of a massive $689 million redevelopment of the Royal Hobart Hospital, for example, is set to start in July.
Along with that, project information services provider Cordell lists a number of other significant dollar value developments as being scheduled to start this year, including the second stage of the redevelopment of a former Myer site, a 12 storey office and retail complex on the site of the former Odeon Theatre and a range of projects associated with the expansion plans of the University of Tasmania.
This comes on top of a good range of developments in 2015 and also very strong activity in the residential sector, in which the number of houses and apartments for which ground broke rose by almost 20 percent last year to come in at 2,780.
Because of this, confidence among builders is sky high: around three quarters of those who operate in the non-residential sector say they expect conditions in their business to improve over the near term, according to a Master Builders survey conducted in January.
In terms of trades most in need, Kerschbaum says many of the projects are still in the formwork stage and so demand is likely to be predominately concentrated around the formwork trades over the near term but adds that fitout trades will come into more demand beyond that once some of these projects progress more toward the fitout phase.
He says whilst commercial builders in Hobart (where most of the activity is centred) were hopeful to pick up some workers due to intra-state migration from the less busy northern part of the state and also from the residential sector as housing activity eases off toward the middle of the year, it was inevitable that workers from interstate would be required.
He says many of the projects are based around Hobart and the industry was hopeful to pick up some help from intra-state migration as the volume of work available in the state’s capital pulls in workers from the less busy north of the state.
Kerschbaum says Master builders was working with major builders was working through with major contractors to see where shortages might hit and what they might look like.
“Fortunately, these projects are all on slightly different timeframes so I hope there won’t be too much overlap,” he said. “The last thing you want is everyone needing a glazier at the time or a plasterer as these projects unravel at different speeds there might be some overlap but you hope it might not be too much. It a question of trying to match our labour resources as best we can.
“But we are certain of one thing, we won’t have enough local labour to go around whether that’s from the south or the north of the state. We will certainly be looking to import labour.”