Return of trade workers eases skilled trades shortage

by | Aug 15, 2023

Home Industry Association logoThe HIA Trades Report is a unique quarterly measure of both the availability and price movements of skilled building trades across Australia. It provides a quarterly review of available trades and the demand pressures on those trades for residential builders and industry professionals.

The HIA Trades Report for the June Quarter 2023 shows continued improvement in the availability of skilled tradespeople across the country. HIA Senior Economist Tom Devitt said while the Index still reflects some of the most acute shortages of skilled tradespeople since HIA reporting in 2003, the trajectory is encouraging.

“The Report’s Trades Availability Index registered -0.62 for the June Quarter 2023, compared to the -0.92 peak a year ago. An index of less than zero represents a shortage of tradespeople and an index of greater than zero represents a surplus,” he said.

“Some of the greatest improvements in availability over the last year have been in the trades of carpentry, roofing, and bricklaying, precisely where the most acute shortages had been a year ago.”

“The return of skilled workers since the re-opening of Australia’s international borders in late 2021, is making a difference to a number of sectors, including house and apartment construction, and manufacturing businesses.”

Mr Devitt said as tradespeople have become more available, the price of trades has also slowed. The price of skilled trades increased by 3.4 per cent in the last year, compared to the 10 per cent peak a year earlier. This is much closer to the two per cent average annual increase that prevailed in the decade-and-a-half before the pandemic.

“The outlook is that as home building activity declines, demand for skilled trades will slow further. The rise in the RBA’s cash rate over the last year has seen a significant drop in new work entering the pipeline,” Mr Devitt said.

“Builders have struggled to complete these projects, held back by the materials and labour shortages that have plagued the industry in the last few years.”

Mr Devitt said the rise in interest rates which is expected to produce the weakest year of new house commencements since 2012, and an increasing number of projects reaching completion will further the easing of trades shortages in the coming year.

“Next year will be the ideal time for governments to start investing in new public housing stock. The timing of this investment will not only ensure that governments are able to gain the greatest return on their investment, as costs and delays will be at a minimum, but also ensure that skilled tradespeople are not lost to other industries and that the industry can rebound on the other side of this RBA-induced trough,” concluded Mr Devitt.