Construction activity and demand for building materials, skills and labour, according to Infrastructure Australia CEO, Adam Copp, is at a historic high.
A market capacity report from the statutory body points to a shortfall of 229,000 public infrastructure workers and challenges accessing local building materials.
“The infrastructure sector is delivering a major public infrastructure pipeline valued at $230 billion over five years,” said Copp.
“This is occurring alongside a plan to build 1.2 million new homes as well as major investment in the energy sector, which is quadrupling over that same period.
“With so much construction activity underway, the industry is finding it increasingly difficult to source key building materials and workers – particularly engineers, skilled trades and labourers.
“A clear message in this year’s report is that limited access to local steel and cement, as well as localised shortages of quarry products is contributing to price uncertainty in the supply chain, leading to delays and cost overruns.”
The annual Infrastructure Market Capacity report identifies key trends in public infrastructure investment, and analyses market capacity constraints that could inhibit delivery of the major public infrastructure pipeline.
Copp said the report finds acute quarry shortages loom in Melbourne, NSW’s Mid North Coast and South East Queensland, while steel imports are increasing because Australia’s steel production capacity cannot meet demand – with a 20 per cent increase in imports over the last two years compared with the previous two decades.
“Global supply chain pressures have eased for now, with steady improvements in international production, trade, and transport measures compared with 12 months ago,” said Copp.
“However, Australia’s lack of domestic capacity to supply building materials exposes investments to cost-overruns, delays and future global supply chain risks. It’s also much more difficult to understand the level of embodied carbon in imported materials.
“Currently, there is no method for collecting or analysing data on local manufacturing and production outputs at the national level, hindering the ability to predict supply and mitigate for shortfalls, as we can do with labour.”
The latest report includes 14 recommendations for the Australian Government to act in partnership with state and territory governments and industry to improve the demand-supply balance, and ultimately the long-term sustainability of the construction sector.
“Australia has an opportunity to build domestic capacity and markets for new low emissions construction materials, such as recycled materials,” said Copp.
“For major road projects, our modelling suggests that close to a third of conventional materials – 54 million tonnes annually – could be replaced with recycled materials.”
The report finds that Australia’s infrastructure workforce will need to grow by 127 per cent to meet demand. It is the third year that Infrastructure Australia has reported significant labour shortages.
“We urge governments to work together and with industry to address this structural workforce shortage,” said Copp.
“While broad skills and workforce reforms are underway nationally, we need to urgently boost the pipeline of workers into the sector and develop a national infrastructure workforce strategy.”
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