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The HIA quarterly tradie index is out and shows an increasing surplus of skilled laborers, although still modest, through late last year with the headline number weakening 7 points to +22. That is still the most slack since 2009:

The latest HIA Trades report for the December 2012 quarter highlights the soft state of the residential construction industry at the end of last year, said the Housing Industry Association, the voice of Australia’s residential construction industry.

The HIA Trades Report, a quarterly survey of builders and sub-contractors, indicates that the surplus of skilled labour increased further in the final quarter of 2012.

“These figures confirm that the skilled trades have endured a most challenging 2012. For the first time in the index’s history, a surplus of skilled labour was recorded in every quarter of the past year,” said HIA Senior Economist, Shane Garrett.

“The weak skills market conditions put at risk the longer term productive capacity of the housing construction industry. This is because current market conditions may deter entry to the industry and halt the accumulation of skills and training. It is vital that improved support for training and upskilling is provided in these difficult circumstances,” Shane Garrett added.

The HIA Trade Availability Index registered +0.22 in the December 2012 quarter, meaning that trades were in moderate oversupply (readings greater than 0.0 indicate oversupply). This had the effect of muting price developments. The HIA Trade Prices Index slipped 0.6 per cent in the December 2012 quarter, equivalent to a reduction of 0.2 per cent when compared to the same quarter in 2011.
HIA Executive Director, Industry Workforce Development, Liz Greenwood added:

“A key reason why there’s a surplus of trades is because no-one wants to spend money on residential construction, including the banks. This lull in activity is hurting our apprentice commencements – no-one can commit to taking on an apprentice because there simply isn’t enough work to justify that level of financial commitment. Now more than ever, the government needs to focus on making sure employer incentives will keep up the flow of skilled labour into the only industry that can build a roof over our heads.”

It may be that this reflects the slowdown in major project construction rather than housing itself, a point the HIA has no incentive to make.

HIA Trades Report Release – Dec 12 Qtr

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.