• Construction output to jump 7pc this year on infrastructure boost: Ai Group, ACA
Construction output to jump 7pc this year on infrastructure boost: Ai Group, ACA
14 Nov, 2017, No Comment

Summary: Construction output will jump 7.1 per cent this year after three years of contraction, as non-mining infrastructure and commercial building work boost the industry, new industry forecasts show.....


A telecommunications and transport-driven boost in engineering work this year, a turnaround in commercial construction and continued strength in large-scale mixed-use residential will push the total value of construction turnover up after a 2.1 per cent decline in the year to June, the latest Australian Industry Group-Australian Constructors Association Construction Outlook survey shows.


"Rising momentum in new road and rail projects, together with telecommunications infrastructure including the NBN, will also support a strong upswing in the value of engineering construction," said Australian Industry Group chief executive Innes Willox.


The report, the latest in a string of industry reports showing the uplift coming to construction as civil infrastructure projects kick in, particularly in transport in Sydney and Melbourne, also highlights one big problem for Australia's highly cyclical industry – the country's skills shortage.


The survey, based on the responses of 100 major construction companies, predicts total employment to pick up 5.3 per cent this year, following last year's 3.1 per cent increase, but warns of growing skills shortages. Separate figures from professional industry body Engineers Australia show national engineering job vacancies rose 14 per cent in the first nine months of 2017.



It has less of a focus on the residential sector – and consequently, predicts fewer job losses – than Australian Construction Industry Forum figures published last week. But this is creating stresses. Nearly two-thirds (63.6 per cent) of companies surveyed for the Ai Group-ACA report said they experienced either "major" or "moderate" difficulty in recruiting skilled labour in the six months to September, up from 39.2 per cent six months earlier.


Sourcing of subcontractors has also grown as a key concern, with the proportion experiencing "major" or "moderate" difficulty increasing to 50 per cent in the six months to September, up from 39.2 per cent in March.


Labour cost pressures were expected to grow next year as major projects ramp up and contractors increasingly compete for the same pool skilled labour. The likely shortage is already prompting some contractors, such as Perth-based Georgiou Group, to expand east to take advantage of the "crunch" on labour caused by the large number of projects occurring at the same time and restrictions coming from abolition of the 457 visa category for short-stay workers.


"Governments and training providers should be taking notice of the emerging skill shortages in the construction sector and be quick to respond with changes to relevant training and immigration categories," Mr Willox said.


The slew of new projects is increasing the demand for skilled labour and some large projects are already pulling in resources from elsewhere. Cross Yarra Partnership, the consortium appointed to the $6 billion Melbourne Metro tunnel and stations project comprising Lendlease, John Holland, Bouygues Construction and Capella Capital, has brought in London-based architecture firm Rogers Stirk Harbour + Partners to assist appointed designers Hassell and Weston Williamson.


"Rogers Stirk Harbour + Partners provide additional resourcing and experience to supplement the detailed architectural design phase for the five underground stations and public realm at each of the station precincts," a CYP spokeswoman said.

www.afr.com/real-estate/construction-output-to-jump-7pc-this-year-on-infrastructure-boost-ai-group-aca-20171113-gzk48t

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