Hopes pinned on pre-fab homes as building pipeline hits $213 billion

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.

“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.

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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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