Australia's acute shortage of skilled trades is beginning to ease, thanks to a slowdown in new home construction.
The Housing Industry Association (HIA) Trades Availability Index registered -0.58 in the first quarter of 2024, improving from -0.64 at the end of 2023.
This welcome change marks the least severe shortage of skilled trades in nearly three years, a significant relief after the industry faced prolonged constraints.
Despite this recent improvement, Australia still grapples with one of the most significant skilled trade shortages since the HIA began publishing this report in 2003, excluding the pandemic years.
As a result, the costs associated with hiring skilled trades continue to rise at a faster rate than usual.
Trade prices increased by 6.2% in the 12 months leading up to March 2024, compared to a pre-pandemic average annual rate of 2.0%.
The recent surge in overseas migration to Australia has fueled a heightened demand for new homes, putting additional strain on the residential construction sector.
Yet, skilled trades within this sector are not recognized on the Australian government's Skills Priority List.
This lack of recognition is concerning, especially when the government is planning to streamline visas for in-demand jobs, excluding several key trades such as bricklayers, carpenters, ceramic tilers, plasterers, joiners, concreters, roofers, painters, landscapers, and plumbers.
This omission could hinder efforts to meet the country's housing needs.
Government policies that lead to boom and bust cycles in the construction sector underscore the importance of a steady flow of skilled labour.
During periods of increased building activity, access to skilled trades from overseas can help alleviate acute housing shortages.
However, the construction industry faces stiff competition for skilled workers from other sectors like public infrastructure, mining, and non-residential construction, further perpetuating the shortage.
Financial incentives that encourage the employment of apprentices and support their retention have proven valuable in attracting more workers to the construction industry.
Additionally, funding for apprentice programs opens doors for individuals seeking a rewarding career in construction.
Geographically, the shortage of skilled trades varies.
Over the past six months, regional Western Australia experienced the most acute shortage, with an average index reading of -0.97, closely followed by regional South Australia (-0.95), Adelaide (-0.85), Perth (-0.83), and Brisbane (-0.69).
Regional Queensland (-0.63), regional Victoria (-0.59), regional New South Wales (-0.58), and Melbourne (-0.58) had somewhat less severe shortages. Sydney reported the least acute shortage, at -0.51.
When examined by specific trade, the most severe shortages in the first quarter of 2024 were in:
- bricklaying (-1.00),
- ceramic tiling (-0.85),
- plastering (-0.74),
- carpentry (-0.74), and
- roofing (-0.70).
These insights underline the critical need to address skilled labour shortages to ensure the sustainability and growth of Australia's construction industry.
