From the HIA today:
The demand for skilled labour in Australia’s residential construction industry is running well below the historical norm, said the Housing Industry Association, the voice of Australia’s residential building industry.
The HIA Trades Report, a quarterly survey of builders and sub-contractors, shows that the availability of skilled trades increased moderately during the June 2013 quarter. Trade price developments were weak, with the average increase clocking in below the rate of general inflation.
Commenting on the latest HIA Trades Report, HIA Senior Economist, Shane Garrett said “These figures will not come as any surprise to trades people on the ground in the residential contruction industry who are generally coping with demand conditions considerably softer than their historical experience.”
“While new home building is starting to recover from decade lows, the national improvement is modest to date. Meanwhile, the pace of renovations activity is very weak,” said Shane Garrett. “The persistence in 2013 of a credit constrained environment for residential construction isn’t helping, nor is an onerous regulatory and taxation framework. Any moves to increase regulatory costs further from the pre-exising high and inefficient base would considerably hamper the prospects of a recovery in residential construction,” noted Shane Garrett.
“Today’s report is also significant because it indicates that many trade rates have not kept pace with general inflation, another consequence of the weak base from which demand conditions are endeavouring to recover,” concluded Shane Garrett.
The HIA Trade Availability Index rose to +0.24 in the June 2013 quarter from +0.19 in March 2013, meaning that the modest oversupply in trades has increased slightly. This situation has resulted in muted increases in the HIA Trade Prices Index for most sectors. The Index increased by 0.4 per cent in the June 2013 quarter, meaning that it was 2.2 per cent higher than a year previously. This is slightly lower than the current inflation rate of 2.4 per cent.
When the residential construction industry does recover, the current profile for skilled labour will quickly reverse. Commenting on the price pressures remaining in certain trade categories, HIA Executive Director, Industry Workforce Development, Liz Greenwood added: “The declining availability of plumbers and plasterers points to the inevitable challenges ahead as housing activity recovers from its low base. If we can’t improve the supply levels for trades such as these, we can expect more of the same, once the keenly anticipated housing recovery takes hold.”
