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Building industry in Australia has skills shortage, report reveals

More investment is needed in skilled trades in the residential property construction industry in Australia, according to the latest Trades Report from the Housing Industry Association.

There is a persistent shortage of skilled labour in some trades despite weakening housing conditions, says the report from the association which is regarded as the voice of Australia’s residential construction industry.

The HIA Trades Report, a survey of builders and sub-contractors, found only very modest growth in skilled labour prices, but a persistent shortage of skilled labour in some trades despite very weak housing conditions.

Four trades in particular; bricklaying, ceramic tiling, painting and plumbing have a severe shortage of skilled workmen and there are also shortages in other trades.

‘The key finding of the Trades Report is that despite March 2012 representing the seventh consecutive quarter of weakness for new home building post the GFC, the availability of skilled trades people is only marginally in surplus,’ said HIA chief economist Harley Dale.

‘These results provide compelling evidence of a structural shortage of skilled labour within the residential construction industry. Otherwise a large surplus of skilled labour would have emerged by now amidst very weak housing conditions, but that simply hasn’t happened,’ he explained.

‘Now is the time to accelerate investment in skills and training, an area where progress is certainly being achieved. Now is also the time to reform the immigration system to support the specific skilled labour requirements of residential construction, something it currently fails to do,’ he added.

The HIA Trade Availability Index registered +0.04 in the March 2012 quarter, meaning that trades were just in the territory of moderate oversupply, a reading between 0 and 1 signals oversupply. Meanwhile the HIA Trade Prices Index increased by 1.4% to be up by only 1.6% over the year to the March 2012 quarter.

‘You can’t just turn the skilled labour tap on when new home building recovers, especially when you are competing with the resources sector for labour. Without further investment and reform, skilled labour shortages will inhibit the much-needed recovery in new home building activity, which would be detrimental to the entire economy,’ concluded Dale.

Reinvent Your Career would like to thank Australia Forum where this article first appeared.

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