300,000 extra needed to build roads, homes and power lines
Sixty per cent of firms surveyed by the agency said workforce and skills remain the biggest risk to delivering projects.
Regional areas of the country will face the greatest challenge when it comes to predicted labor shortages.
The current shortage in regional areas will increase from 38,200 currently to 181,000 by 2027. The shortage in the capitals is expected to rise modestly from 131,700 to 148,000 before starting to ease with the completion of major projects.
Queensland’s Sunshine Coast, Toowoomba and Wide Bay, as well as NSW’s Murray, Riverina, Hunter Valley and New England regions, are most vulnerable to worker shortages.
This is due to the increase in public investments in these areas. About $700 million, largely from new energy projects, is planned for the New England region alone, with $550 million earmarked for the Sunshine Coast.
Trades workers and laborers account for more than 60 percent of the expected labor shortage.
Copp said that increasing efficiency in the infrastructure sector will be vital in the realization of projects, especially in regional areas.
New production methods such as prefabricated housing can reduce the costs faced by the construction industry.Credit: Kate Geraghty
“This massive investment with community involvement presents a once-in-a-generation opportunity for these regions. But to effectively unlock this opportunity and ensure we have the manpower to do the job, we need to turn the page on three decades of stagnant productivity in construction. We must do more with less,” he said.
“We need to start investing in innovation rather than fixating on delivery at the lowest possible cost.”
The agency estimates that $163 billion is allocated to renewable energy projects, including transmission lines, solar power plants and pumped hydroelectric power plants, across both private and public infrastructure. Most of these are planned for regional areas.
There are signs that price pressures for infrastructure projects are starting to ease.
The agency stated that prices of basic construction materials such as timber and cement have largely followed general inflation over the last 12 months.
However, steel prices fell due to a significant increase in imports of cheap finished steel. Imported steel is up to 50 percent cheaper than domestic production.
The report was published after new figures from the Australian Bureau of Statistics revealed that the number of new mortgages taken out by investors hit a record high in the three months to the end of September.
Investor loans increased 13.6 percent to 57,624 in the quarter. The previous record for investor loans was set at 52,787 in March 2022, when official interest rates were 0.1 percent.
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Loans to homeowners also increased in the quarter, reaching a three-year high of 83,846; of these, 29,637 were given to first-time buyers.
The rise in investor lending has led to speculation that the Australian Prudential and Regulatory Authority could use so-called macroprudential rules to restrict the share of bank lending to investors.
The Greens’ housing spokeswoman, Barbara Pocock, said the last time the authority tightened investor credit was between 2014 and 2018, which helped slow the rise in house prices.
“Australia needs to get back in the business of lending to owner-occupiers rather than property investors, and if the government won’t do that, APRA should,” he said.
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