THE ongoing skilled labour shortage has resulted in a sharp bump up for tradies rate of pay over the last year. According to the latest HIA Trades Report, which provides a review of the availability of and demand pressures for trades operating in the residential building industry, the prices of skilled trades people was up 10.4% in the year to the September quarter 2022. This comes after the ABS reported new housing costs were up 3.7% over the September quarter, remaining the leading driver of record inflation levels.
While the severe shortages of skilled trades eased in the September Quarter 2022, the HIA Trades Availability Index remained close to its lowest level on record resulting in the recent rapid increase in rates of pay,” said Nicholas Ward, senior economist at HIA. Over the September quarter, the HIA Trades Availability Index was at -0.86, up from the lowest level on record in previous quarter, at -0.92. “Any number below zero indicates a skills shortage, and these stark results reflect the severity of the current shortage and the corresponding increase in building costs,” added Ward.
During the June quarter, HIA reported a record high of more than 104,000 houses under construction country-wide, 81.2% higher than pre-pandemic levels. With renovation activity also up to record levels. “This elevated demand for home building has exacerbated the pre-existing shortage of skilled trades. The rise in the cash rate will slow building activity, but this is not expected to adversely affect demand for building trades on the ground until 2024,” said Ward. Bricklaying and carpentry were found to be the most impacted trades, with an index of -1.49 and -1.21 respectively.
“There are two bits of good news. Firstly, the number of apprentices in trade occupations was 27% higher in the March Quarter 2022 than the March Quarter 2019, driven by government subsidies and high demand. Secondly, this week’s Federal Budget indicates that Net Overseas Migration is returning much more quickly than previously expected. This likely reflects both strong desire from foreigners to live and work in Australia, and some reluctance amongst Australians, relative to pre-pandemic, to live and work overseas. This improving source of labour supply will help builders and other businesses with the labour shortages that have been exacerbated by the pandemic,” concluded Ward.