Latest employment data shows Australia is crying out for another 21,000 tradies — and the numbers are growing in an early warning prices might be about to, too.
The Albanese government is facing a more than 21,000 tradie headache that risks driving up rents, home prices and interest rates.
Latest Australian Bureau of Statistics data shows that in the three months to February there was a 21,600 construction job shortfall across the country.
It’s a 19.3 per cent jump from November, when there were just 18,100 construction sector jobs employers were seeking to fill.
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That was the lowest number since May, 2020, when the country was in the depths of the Covid-19 pandemic.
With demand waning, so was the ability for tradies to increase their rates.
But with the numbers now climbing again, there is a risk the cost of trades on building sites, both for homes and government funded infrastructure programs, will soon begin to rise once more.
Housing Industry Association senior economist Tom Devitt said while there could be some seasonality in the data, it appeared the nation might have hit the “bottom of the trough” for tradie shortages.
“It was comparable to pre-pandemic levels,” Mr Devitt said.
“But even with the best we got this cycle, there was still a structural shortage of trades.”
The nation is still well short of building the number of homes needed to address housing affordability, meaning demand for tradies must rise.
The economist said their expectations for 2026 were for demand for construction sector workers to rise.
Mr Devitt said the only short-term solution to the demand would be increased numbers of skilled workers for the construction sector coming from offshore, which there were some early signs of in migration data.
The economist said that if demand persisted and grew, it could mean higher construction costs and land costs — with civil construction workers needed to prepare land before homes can be built.
“And, in a perverse way, it really could make interest rates more likely to rise,” he said.
“Higher interest rates generally means lower inflation, except in the housing economy it can have a reverse effect.”
The upshot there could be fewer people building homes, with government projects continuing to ramp up demand for construction workers.
The increasing trade demand could be a major headache for the Albanese government and its battle with inflation. Picture: NewsWire / Martin Ollman.
“So, after a few years, the impact of undersupply (of homes), that puts upward pressure on rents and home prices and mortgages.
“And these are significant shares of the Consumer Price Index.”
Mr Devitt said the industry hoped the government was paying attention to the stats.
“We are not seeing a dire situation in the official data yet, but some of the early signals suggest that we could see that ahead,” he said.
A further element to the government’s headache, is that the demand for trades is rising despite housing approval numbers released earlier this week still remaining far below the level needed to hit the nation’s 1.2 million new homes by mid 2029 goal.
The National Housing Accord target is now at such risk, economists were earlier this week tipping the government could look to move the goalposts in the May budget.
Solutions for the government included increasing the release of land in new housing estates, which would limit increases in price caused by competition from buyers who are willing to build.
Otherwise, the economist said the fastest solutions were increasing the construction workforce via more migration of skilled trades, and doing more to encourage apprentices to commence and complete their training.
Altering taxation over the property sector to reduce the government’s take on new homes could also help make new homes more affordable, even if trade costs did rise.
The wider ABS jobs data also showed big increases in demand for wholesale trade jobs.
Even the cost of producing the land for building homes on is likely to rise if construction job demand continues to rise.
The highest demand for jobs was in health care and support services, where there was a 57,800 workforce shortfall in February.
Across the nation there is an about 340,000 jobs that employers would like to fill, up by more than 12,000 compared to a year ago.
The demand for IT workers was down significantly, dropping 9.5 per cent, while arts and recreation services roles recorded a 5.6 per cent reduction in demand in the past three months.
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