Productivity boost ‘the only silver bullet’ for construction

Increased migration and boosted training programs will not solve the building industry’s critical workforce shortages, the Australian Constructors Association says.

Increased migration and boosted training programs will not solve the building industry’s critical workforce shortages, with the Australian Constructors Association saying boosting productivity is the only “silver bullet” to address an estimated shortfall of 105,000 workers by next year.

Ahead of the Jobs and Skills Summit next week, the peak body is pushing for the Albanese government to implement a rating system for all commonwealth-funded infrastructure projects in a bid to hold the sector to account and ensure projects are delivered on time.

ACA chief executive Jon Davies said the sector was in dire need of a “disrupter”.

“The construction industry contributes 8 per cent of GDP and yet its productivity growth lags other major industries by 25 per cent,” he said.

“The opportunity of closing this gap is enormous. Just halving this productivity gap would result in savings of $15bn annually and, more importantly, ensure the industry is positioned to deliver the record pipeline of projects.”

Mr Davies said no amount of migration or training would solve the labour force challenge.

“Improving productivity performance is not a matter of choice,” he said. “The industry is facing a critical workforce shortage of 105,000 workers within the next 12 months and with low unemployment, there is no volume of migration or training that will solve this challenge. The silver bullet is improved productivity – doing more with less.”

Mr Davies said the government could implement its new system, the Future Australian Infrastructure Rating, without significant change to existing governance or funding frameworks.

It would measure projects against a range of key reforms, including participation amid concern females make up only 12 per cent of the construction workforce, with more than three-quarters of those in clerical or administrative roles.

The new system could be included in the next iteration of the National Partnership Agreement as a requirement for all federally funded projects.

“FAIR would bring forward a step change in productivity, innovation and industry practice by instilling collaborative behaviours, focusing on quality outcomes and sharing lessons learnt,” Mr Davies said.

Amid an infrastructure spend predicted to peak at $19.4bn in the third quarter of 2024, the Grattan Institute on Monday released a report finding the allocation of discretionary funding was frequently wasteful, with taxpayer dollars often funnelled into government-held seats, and that it undermined public trust in political leaders.

It recommended grants should be determined by the public service.