Massive labor shortage threatens hundreds of billions of dollars in infrastructure investments

A new report from the country’s infrastructure advisory agency warns of a massive labor shortage, jeopardizing hundreds of billions of dollars in infrastructure, housing and energy projects across the country.

Infrastructure Australia’s annual market capacity report has revealed there are currently only 177,000 workers in the system, despite there being enough demand for the equivalent of 405,000 workers.

The agency is also sounding the alarm about construction materials shortages, as parts of the country struggle to access sufficient supplies of steel, rock and sand for major projects.

“Over the next five years we are planning to deliver $230 billion in major public infrastructure, 1.2 million new homes and four times investment in clean energy infrastructure,” Infrastructure Australia chief executive Adam Copp said.

“Unfortunately, we do not have the people or the materials to turn that ambition into reality.

“Unless we really focus on managing this pipeline and expanding market capacity, communities will be left without the infrastructure they need, taxpayer money could be wasted and inflation will hit harder than it already is.”

It is the third time in as many years that Infrastructure Australia has raised concerns about labor shortages.

The agency has made several recommendations to alleviate some of the shortage, including urging the government to modify “immigration settings” to ensure the nation “brings in the workers we need for the construction sector.”

“But we really need to focus on the long term and we need to look at creating a national workforce strategy to attract more people into the construction industry, invest in STEM subjects for people and also make sure people are retained within the construction sector. industry so that our investment pays off,” said Mr. Copp.

Australia’s major cities will be hardest hit by labor and materials shortages, as well as the Murray, Mid North Coast and Riverina regions of New South Wales, central Queensland and the Northern Territory hinterland.

“There are a variety of investments going on there; many of them are utilities, like energy projects,” Copp said.

“The problem is not just that this is a huge amount of growth, but it’s a very large increase in growth – a super normal amount of investment growth going forward.”

Copp said the federal government’s recent infrastructure project review was a direct response to previous warnings about the viability and sustainability of large projects across the country.

Emphasis on recycled materials needed as dependence on imports grows

Infrastructure Australia said the nation was becoming more reliant on imports of construction materials.

“Steel has increased by 20 percent in the last two years and lumber has increased by a similar amount,” Mr. Copp said.

“We are also starting to see that mined materials such as rock and sand and other inputs to create cement are also starting to become scarce in key areas such as the mid north coast and south east Queensland.

“Governments need to build internal capacity in terms of materials, but also internal capacity in terms of skills.”

Among Infrastructure Australia’s recommendations is to place greater emphasis on the use of recycled material in large construction projects.

“27 percent of the materials used in road projects could be replaced with recycled materials,” said Mr Copp.

“There are some pockets of good practice across the country: Victoria, with its recycle first strategy, has used procurement, which makes it a rule for the private sector to recycle some of its materials and use them in its infrastructure projects.

“But there is a bit of a cultural problem in the sector, people think it is not as high quality but that is simply not true and there is a real opportunity for the government to encourage better use of recycled materials in the future.”