The latest Housing Industry Association (HIA) Trades Report provides a weak update on the residential construction industry for the first quarter of 2012.
The 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.
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 per cent to be up by only 1.6 per cent over the year to the March 2012 quarter.
"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 Dr Harley Dale.
"Furthermore, five trades - bricklaying, ceramic tiling, painting, plumbing, and 'other trades' - remain in short supply."
"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," said Dale.
"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 noted.
"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.”
