Robert Sobyra of Australian Constructors says labour supply worst since ‘post-war era’
The Queensland construction industry faces challenges that will “dwarf” the troubles of the pandemic, an industry leader says. Here’s why
Kathleen Skene2 min read May 28, 2023 - 3:17PM Gold Coast Bulletin
The Queensland construction industry faces challenges that will “dwarf” the troubles of the pandemic if urgent action isn’t taken to address labour supply shortages, a meeting of builders and developers has heard.
Australian Constructors Association policymaker Robert Sobyra said national data showed the financials of large residential builders were already perilous, with more than half “technically insolvent”.
Compounding the pain is a mismatch between the number of construction jobs available and the number of people around to fill them, which is the worst it’s been in almost 80 years, at a time when demand is high and swiftly growing.
“For every job vacancy in construction at the moment, there’s less than one unemployed construction worker,” Mr Sobyra said.
“That’s incredibly tight, we haven’t seen that since probably the post-war era.”
Speaking at a Property Council of Queensland lunch on the Gold Coast, Mr Sobrya said many builders were still struggling after being caught out by rising material costs, but that problem was, thankfully, “yesterday’s news”.
“Prices aren’t falling, that’s not what prices do, but the acceleration of price growth is coming back down to normal,” he said.
“There are some builders still suffering from having to endure that gap between the prices they were paying and the prices they received.”
Mr Sobyra said he’d tracked Equifax data on the ratio of assets to liabilities for builders of large residential projects.
“For the median (builder in that category), that ratio has now gone negative,” he said.
“That means half of large vertical builders in Australia at the moment are technically insolvent and that’s a pretty dire kind of conclusion.”
Although the pandemic-influenced cycle would eventually end, there would be no “utopia” waiting at the end.
Mr Sobrya said a stack of factors had converged on the industry at this time of historically low labour supply.
As well as unprecedented need for residential housing, construction demand would be rocket-fuelled by amped-up spending on health and defence; the transition to net zero transmissions; and infrastructure needed for the 2032 Brisbane Olympics.
“This industry is facing some huge structural imbalances between supply and demand that will go over the top of the pandemic cycle and will dwarf everything for the next few decades,” he said.
“On the demand side, we’re looking far above just accommodating every extra person, we’ve got to look at all this other stuff.
“At the same time, we’ve got the supply side shrinking – we’ve got an ageing population, which means the workforce is shrinking.
“By 2050, the share of the population who are young men will be about be about half the number it was in the 1980s and that’s the main cohort of workers you rely on to build things.
“The industry also has an image problem, people are turning away from it –it’s not just women who don’t want to work in it, there are a lot of young
men who don’t want to work in our industry and we’ve got to work on that if we’re going to keep the ranks full.
“This structural imbalance between (labour) supply and demand isn’t going away soon so we’ve got to fix that.”
