Tradie surplus

The HIA has released its quarterly report into tradie availability and while the result is not bad, the emerging suplus falling slightly, it will only spur on the macro Mandarins looking to reverse yesteryear’s adjustment to a mining-led labour force.

The latest HIA Trades Report for the September quarter provides a profile of skilled labour availability consistent with very weak residential construction activity in 2012, said the Housing Industry Association, the voice of Australia’s residential construction industry.

The HIA Trades Report, a survey of builders and sub-contractors, highlights a historically high availability of skilled labour due to depressed levels of housing demand.

“A greater availability of skilled labour provides an accurate reflection of current market conditions, which is of little solace to tens of thousands of tradespeople who are really feeling the pressure of persistently weak residential construction activity,” said HIA Chief Economist, Harley Dale.

“It is a cyclical situation and the experience around the GFC provides recent evidence that once a recovery is underway, skilled labour supply will tighten up very quickly,” said Harley Dale.

“A continuing focus on investment in skills and training is imperative during these cyclically weak times to ensure that a labour shortage doesn’t represent a constraint on a sustainable residential construction recovery,” Harley Dale added.

The HIA Trade Availability Index registered +0.15 in the September 2012 quarter, meaning that trades were in moderate oversupply (a reading between 0 and 1 signals oversupply). Meanwhile, the HIA Trade Prices Index eased by 0.3 per cent in the September 2012 quarter to be down by 0.4 per cent when compared to the same quarter last year.

HIA Executive Director, Industry Workforce Development, Liz Greenwood said: “the HIA Trades Report shows more than simply whether or not certain trades are currently available for work in the industry. It is also a business barometer.

‘For example, in today’s report, we can see that those businesses that are heavily reliant on the discretionary spending decisions of people wishing to renovate their own homes, such as painting and landscaping businesses, are doing it particularly tough”.

A cyclical situation, eh. Maybe. Interest rates are already at GFC lows and nothing has happened. And comparing now to the post GFC hyper-stimulatory environment seems very hopeful indeed. I expect this tradie surplus to worsen.