Construction industry expected to flourish

Posted October 13, 2011, by Josie Chun

Permanent recruitment has risen in the last three months from four per cent to seven per cent of recruitment agency jobs, with engineers topping the skills shortages list, according to the latest RCSA (Recruitment & Consulting Services Association) survey. On-hired and contractor placements have dropped from 97 per cent to 92 per cent in that time.

This is a positive sign of employment and economic recovery, according to Julie Mills, CEO of the RCSA.

‘When there’s a rise in permanent hiring, it’s a sign that employers are confident they have the work and the revenue to keep people on long-term. And in past downturns, it’s been a sign for the recruitment sector that the worst is over and the recovery has begun in earnest,’ said Ms Mills.

Australian Constructors Association (ACA) President, Wal King AO, says, ‘The survey confirms the strengthening outlook for Australia's non-residential building industry, supported by significant planned infrastructure work and the expanding pipeline of resource- related construction projects.’

Key findings of the AIG/ACA survey

  • Australia's leading construction companies predict that the total value of construction work will rise by 4.1 per cent through 2010 and 7.4 per cent in 2011, up from 2.7 per cent in 2009.
  • Engineering construction is expected to experience the strongest growth with a forecast rise of 6.5 per cent this calendar year and 8.9 per cent in 2011. This should result from improved demand for commodities, the re-start of projects in the resources sector, and the large number of planned transport infrastructure, oil and gas ventures.
  • Non-residential building (commercial construction) will decline 1 per cent this year but will return to growth (3.9 per cent) in 2011.
  • Private sector work is predicted to be down by 7.6 per cent this year but will bounce back with a 2.1 per cent rise next year.  However, public sector work is expected to experience continued growth (10.5 per cent in 2010 and 6.5 per cent in 2011), mainly due to critical support from the Federal Government’s education building stimulus program.
  • The total value of apartment building is predicted to continue its decline (22.7 per cent) but is expected to turn around with a 15 per cent rise next year.
  • Higher workloads and increased investment is expected to lead to a rise in employment in the construction sector, particularly in 2011 (4.8 per cent).

Federal budget to boost construction industry

The recently announced Federal Budget is expected to give a big boost to the construction sector with the Critical Skills Investment Fund. The government is investing $200 million to pay for 39 000 extra training places in trades with the biggest skills shortages and has identified resources, construction and infrastructure as its highest priorities.

This is great news for the building and construction industry.

‘The survey suggests the recovery in the construction sector will gradually gather the momentum lost during the Global Financial Crisis with a return to strong growth during 2012. As the construction sector returns to pre-crisis levels of growth, the demand for skilled labour will grow further and it is vital that we act now to ensure we are well equipped to meet this higher demand,’ says AIG Chief Executive, Heather Ridout.

‘The Federal Budget contains positive news for the pipeline of infrastructure projects and measures that make important inroads into emerging skill shortages. The industry needs to actively and deeply engage in these skills initiatives if damaging skill shortages are to be minimised,’ says Ridout.

Josie Chun

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