• Billy Cheng

IA forecasts increase demand for skills, labour and material.

Updated: Dec 16, 2021

A new Infrastructure Australia report warns of potential shortages in skills, labour, and materials as significant public infrastructure development is expected to treble over the next three years.

The first Infrastructure Market Capacity Report from Infrastructure Australia predicts a jump in resource demand as a result of the significant growth in public infrastructure expenditure.

The report is in response to a request from the Council of Australian Governments in March 2020 for Infrastructure Australia to report on the market's ability to deliver on the record investment pipeline on a regular basis.

Its findings highlight the need of Australia's governments and businesses working together to drive sector-wide reform and lessen the risk of cost overruns and delays in large infrastructure projects.

"The Infrastructure Market Capacity report is an Australian first and a new data capability for Infrastructure Australia," said Romilly Madew, CEO of Infrastructure Australia.

"It gives governments a level of visibility into the major project pipeline and the resulting demand for skills, labour, and materials that they didn't have before."

"Over the following three years, major public infrastructure activity will roughly quadruple, culminating at $52 billion in 2023."

"This record investment generates new potential for local businesses and jobs, but it also puts the market's capacity to accommodate this rise in investment at risk."

"By mid-2023, employment in the infrastructure industry will have to increase from 183,000 to over 288,000 employees."

"A potential job shortage of more than 105,000 positions is expected, with one out of every three jobs offered remaining unfulfilled." This opens up the possibility of more work, but there's also a chance that these positions will go unfilled."

The following are some of the key findings:

· Industry reports have lost confidence in their ability to produce on time and on budget, resulting in a forecasted average annual growth rate of 33%.

· Industry has a high level of confidence in producing annual growth of 10-15%, but a low level of confidence in growth of more than 18%.

· Plant, labour, equipment, and materials demand will be two-thirds higher than it was five years ago.

· Over the next three years, it is anticipated that:

· Demand for materials has increased by 120 percent on average.

· Demand for equipment has increased by 125 percent.

· Demand for plants has increased by 140%.

· Demand for skills is 48% higher than supply at its peak. To meet this demand, annual growth of 25% over the next two years would be required, which is more than eight times the predicted annual growth rate of 3.3 percent.

· There are probable shortages in 34 of the 50 public infrastructure vocations listed.

"While infrastructure investment is an important part of our national COVID-19 recovery, we must be prepared to deliver this once-in-a-generation infrastructure investment," Ms Madew said.

"The task of achieving a step-change in infrastructure productivity and innovation is a shared one; neither governments nor business can tackle it on their own."

Caroline Wilkie, Chief Executive Officer of the Australasian Railway Association (ARA), said the findings were a welcome acknowledgement of this crucial issue.

While projected skills shortages are difficult to address, Ms Wilkie believes that an emphasis on education and training to meet short and medium-term demands is an important part of the solution.

"By 2023, demand for skills will be 48% higher than supply, with the transportation infrastructure industry expected to be at the centre of the storm," Ms Wilkie predicted

"This is the clearest indication yet that we must act now to ensure that we are prepared to face the extraordinary investment and growth that will occur in the future."

"Today's analysis confirms key recommendations in RA's September 2020 Procurement Reform Report, around long-term pipeline visibility, potential skills shortages, and worker culture challenges," said Michael Kilgariff, CEO of Roads Australia.

"In particular, RA has urged the federal government to take the lead in developing and coordinating a national infrastructure pipeline in partnership with other governments."

"This will help to create a more manageable flow of work and will enable industry players of all sizes to better plan their activity."

"In the construction sector, excessive work hours and tiredness have resulted in poor mental health outcomes. These negative elements make it difficult to attract and retain brilliant people from all walks of life who want to work in the construction industry."

"In order to attract a long-term workforce, we must ensure that our employees are able to be inventive, feel comfortable, have possibilities for personal growth, and feel involved and respected."

The report's first section focuses on large public infrastructure projects (transport, utilities, and building infrastructure) worth more than $50 million for Tasmania, the Northern Territory, and the Australian Capital Territory, and more than $100 million for the rest of the states.

Infrastructure Australia's continuing Market Capacity Program will monitor and report on market capacity, and the Infrastructure Market Capacity Report is the first step of that work.

The Market Capacity Program is currently in its second phase, which will be released in the first half of 2022.

Source: Lauren DeLorenzoOctober 13, 2021, Infrastructure Magazine, IA forecasts increased demand for skills, labour and materials.

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