Here’s another reason why we can’t build enough homes.
There’s too many suits in the construction sector, apparently.
Independent economist Tarric Brooker noted last week that there’s a bit of a puzzle in the construction industry.
We often hear how there’s a shortage of construction workers. The big developers are saying that it’s really hard to get enough workers right now.
And it’s one of the reasons why everyone was scratching their heads a few months back when the government added yoga teachers to the skilled migration list, but excluded construction tradies.
So there’s a famous shortage of construction workers.
But as Brooker notes, when you look at the data, we actually have quite a lot of workers in the construction industry.
Growth in the number of construction sector workers has been running well ahead of the population for decades.
“Since 1994 the construction sector has expanded at a much faster rate than the population, with the sector growing by 126.3% compared with 49.6% for the broader population”.
And that has left as with one of the largest construction sector workforces in the world (as a share of the population):
So how does that worker? Is there a shortage of construction sector workers or not?
Well, Michael Bleby at the AFR reckons the problem is that there’s too many suits – the construction sector workforce has seen big growth in office professionals, at the expense of tradies:
The industry as a whole is suffering from an imbalance of too few workers on the ground and too many in the office.
In 2003, professional workers accounted for 28% of the construction workforce. By 2023, this had risen to 38%.
The growth in professional employees – professionals with tertiary degrees and building technicians with advanced diplomas – surged, rising 125% over the two decades from 242,900 to 547,300.
But the annual output per professional worker fell 17.2% to $470,900 from $568,900.
“The rapid rise in the number of professional workers that are now required to deliver projects across the country is at odds with the number of workers ‘on the tools’”, RLB’s Oceania director of research, Domenic Schiafone, noted.
Lol. It’d be easy to say that the construction industry has gone soft.
But developers aren’t employing suits for the fun of it.
And the truth is, construction is a more complex beast these days. The regulatory burden has gone up across the board, and the low-hanging fruit (simple projects on well-suited land) is all gone.
Which is all why we keep failing to meet our housing targets and the housing shortage just goes from bad to worse.
We need more workers – both blue and white collar – per project now.
And that’s why you can have strong growth in the construction sector workforce AND still have a worker shortage.
Man, the housing crisis is just such a tough nut to crack, hey?
DB