Construction sector to shed 140,000 jobs

The construction sector is set to lose about 140,000 jobs over the next two years.

Kerry Barwise from FTI Consulting said, in the six months to April, ‘we saw more than 700 projects and in the month of June we only saw 11’.

The construction sector is set to lose about 140,000 jobs over the next two years, new forecasts reveal, with the losses to be most keenly felt in Victoria which is facing an 18 per cent contraction in its building labour force.

The Australian Construction Industry Forum’s July update, released on Monday, contains research by FTI Consulting forecasting a 12 per cent national decline in construction employment by the end of 2021, driven by a drop-off in new projects.

In June, only 11 projects of greater than $20m were announced, worth a total of $771m. But this compares with 91 projects announced in May with a total value of more than $20bn.

Fewer high-value infrastructure and utility projects drove the marked decline, with the largest project in June relating to a segment of the Inland Rail valued at $300m.

Kerry Barwise from FTI Consulting said that, in the six months to April, “we saw more than 700 projects and in the month of June we only saw 11”.

“So, there’s a drop in the number of projects that are turning up. And you’ve got to think it’s got a lot to do with the virus.

“This reinforces why we have been forecasting a decline in building activity and a decline in employment.”

Mr Barwise, who has done the forecasting for ACIF for the last decade, said that, while the government was aiming to bring forward infrastructure projects, “we’ve not yet seen the next wave of projects to come through.”

The fall off in construction jobs in Victoria will see employment in the sector reduced to 275,000 in 2021, down from 337,000 in 2019, according to the FTI forecasts.

In NSW, building job losses are estimated to fall to 327,000 from 362,000 over the same period.

In both Victoria and NSW, the construction sector workforce will not return to its pre-pandemic levels for several years.

Across the nation, FTI finds the construction workforce is estimated to contract from 1.18 million to 1.05 million and reduce aggregate employment in Australia by more than 1 per cent by the end of 2021.

The forecasts also show the job losses will be much more pronounced for tradespeople and low-skilled workers in the construction sector out to 2024 than for highly skilled workers.

In the July update report, ACIF executive director James Cameron warns that the global pandemic and lack of migrants entering Australia had resulted in a “fall in demand for construction”.

“While the federal government’s HomeBuilder program has been very welcome, ACIF would also like to see stimulus for non-residential construction,” he said.

“Recent surveying that ACIF conducted with Morgan Stanley revealed that most respondents thought business for construction would be back to normal in the first half of 2021, but 41 per cent thought it would take longer. Forty seven per cent of respondents expected some level of job losses in their business.”