Source : the age
Pre-fabricated homes assembled in suburban factories will help make housing more affordable, Treasurer Jim Chalmers has declared amid warnings that building costs continue to climb amid a $213 billion national pipeline of major infrastructure work.
As the federal government’s Infrastructure Australia agency revealed construction faced a 197,000 shortfall in key workers, Chalmers said pre-fab building offered the chance to tap staff and lift productivity in a sector that has been the source of much of the nation’s inflation pressures since the pandemic.
Workers pull together pre-fabricated building parts.Credit: NXT TEC
Infrastructure Australia’s annual market capacity report, released on Monday, found construction costs had climbed 30 per cent over the past three years, feeding into higher prices for everything from multibillion-dollar public infrastructure projects to the renovation and housing sector.
The government’s target of building 1.2 million homes by the middle of 2029 is behind schedule as construction costs remain high and potential buyers struggle due to interest rate settings.
Chalmers said while some costs had started to come off in recent months, the biggest issue remained finding enough skilled workers to get homes built.
He said pre-fabricated housing, with people brought to suburban factories rather than being spread out across individual worksites on the fringes of capital cities, was one area promising to reduce costs and lift overall construction productivity.
“It’s easier getting workers to places where you make pre-fab housing than to sites all around, for example, south-east Queensland,” he said.
“I see what the employers can do when it comes to building pre-fab houses effectively in factories in the suburbs of big cities is much easier as a labour market policy than getting people out to sites.”
Chalmers said he remained confident the country would build “a heap of homes” in coming years.
“We’ve got all the pieces, but everyone needs to do their bit. We have to make sure we have the skilled workforce,” he said.
The skilled workforce needed for 1.2 million homes will have to be found just as governments and the private sector spend an estimated $213 billion over the next five years on major projects.
While down 8 per cent on Infrastructure Australia’s estimate from last year, the peak in building has been pushed back a year to 2026, which the agency attributed in part to building companies struggling to meet “overly ambitious” targets.
It found the current five-year outlook is more realistic but warned it would be constrained by a shortage of workers which, while down 13 per cent on last year’s forecasts, still stood at 197,000. Almost two-thirds of new workers will come from vocational training and 25 per cent from higher education, while 10 per cent are expected to be migrants.
Infrastructure Australia chief executive Adam Copp said there has been a delay to 7 per cent of the pipeline of major projects.
“The nation’s infrastructure ambitions continue to be challenged by skills shortages, stagnant productivity growth and rising material costs,” he said.
Infrastructure Australia chief Adam Copp says despite an easing in some pressures, the pipeline of major works will test the nation’s construction workforce.Credit: Peter Rae
“Construction materials on average cost around 30 per cent more than they did three years ago, and with ongoing skills shortages, we simply don’t have the people power we need to get the job done on time.”
According to Infrastructure Australia, the type of major projects now under way is changing as public transport work is completed, to be replaced with new energy and building facilities.
Transport accounts for $126 billion of all work, down $32 billion on last year due to the completion of mega-projects across NSW and Victoria.
Spending on building infrastructure has been increased by $8 billion to $71 billion due to a string of new works in areas including hospitals, residential construction and convention centres.
Spending on utilities is expected to reach $16 billion, led by a six-fold increase in renewable energy projects. Much of these projects will be in regional areas, particularly in Queensland and the Northern Territory, putting a strain on their already stretched workforces.
Copp said a continuing problem was the lack of productivity growth across construction, which he put down to a poor working culture of “excessively” long hours, little workforce flexibility and a shortage of diversity.
“To attract new workers to the industry and retain the ones we have, government and industry need to address the underlying cultural issues that are holding productivity back and driving people, particularly women, away from a career in construction,” he said.
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