WESTERN Australia’s construction sector is warning of impending labour shortages amid indications of a revival in the home building market.
Data from the Housing Industry Association has shown residential construction already beginning to increase in WA, with new home builds increasing by just over 8 per cent in the September quarter.
Building approvals have also increased - bucking a nationwide trend of reductions in building approvals - while residential land sales in Perth and Mandurah hit a three-year high in September; both are indications of increasing residential construction down the line.
Construction Training Fund executive director Ralph Dawson said he had noticed definite signs of renewed life in the sector.
“We’re starting to see some green shoots in the housing sector, which has really been in the doldrums,” he said. “There’s hope that it’s going to pick up in the next six months.”
But while an uptick in the sector was positive for the economy and builders as a whole, Mr Dawson warned of a likely shortage of qualified builders.
Residential building companies are traditionally the biggest employers of building apprentices, and the downturn in the housing market in the past year has led to a drop in the number of apprentices.
Apprentice commencements in the construction industry decreased by 22 per cent during the past financial year - a situation Mr Dawson said did not bode well for increasing activity.
“Because we’ve had a significant downturn in apprentice commencements, you’re not going to have the workforce that you really need when things pick up again,” he said.
It was a prediction echoed by Perth builder Dale Alcock.
“We’re anticipating a tightening of the home building labour force over the next three months and a shortage in the next six to 12 months,” Mr Alcock said.
He said there would likely be delays in home completions as a result.
To make matters worse, the Construction Training Fund was forced to cut subsidies to support apprenticeships because of disappointing financial performance.
The fund relies on a 0.2 per cent levy paid on building projects for income, which it then uses to fund subsidies for apprentices.
Mr Dawson said the downturn in the residential building sector, which he estimated had reduced by about 30 per cent in the past year, had affected the fund’s revenue.
It recorded revenue of $30.1 million in the 2011-12 financial year. That was down on budgeted revenue of $32.2 million and largely a consequence of an 8 per cent drop in levies paid from residential construction.
The fund had managed to reduce expenditure by cutting the number of payments made to subsidise apprenticeships; it paid out 5,199 subsidies to employers of apprentices, down 6 per cent.
The bonus subsidies paid to employers of mature aged apprentices was cut by 11 per cent to 1,300. The fund recorded an operating deficit of $2.2 million despite the subsidy cuts saving it $900,000.
Mr Dawson said the fund was relying on bank balance improvements in the 2012-13 financial year to enable it to continue funding subsidies at the current level.
“(But) if the revenue base deteriorates even further then we’d have to look at cutting some subsidies,” he said.
Mr Dawson also blamed the resources industry for poaching skilled staff from the construction sector; he has continued to argue the resources sector should also pay the construction levy to help fund apprentice training.
