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Infrastructure Australia releases 2023 market capacity report

Infrastructure Australia warns that infrastructure, energy and housing are being threatened by shortages of key materials and skills

Infrastructure Australia has released its 2023 Infrastructure Market Capacity report, in which it says that Australia’s ability to build infrastructure, housing and energy projects is being hampered by a lack of local building materials and a significant shortfall in skilled workers.

“Construction activity and demand for building materials, skills, and labour is at a historic high,” Infrastructure Australia chief executive Adam Copp says.

“The infrastructure sector is delivering a major public infrastructure pipeline valued at $230 billion over five years. This is occurring alongside a plan to build 1.2 million new homes as well as major investment in the energy sector, which is quadrupling over that same period.

“With so much construction activity underway, the industry is finding it increasingly difficult to source key building materials and workers – particularly engineers, skilled trades and labourers.

“A clear message in this year’s report is that limited access to local steel and cement, as well as localised shortages of quarry products, is contributing to price uncertainty in the supply chain, leading to delays and cost overruns.”

The annual Infrastructure Market Capacity report identifies key trends in public infrastructure investment, and analyses market capacity constraints that could inhibit delivery of the major public infrastructure pipeline.

Copp says the report finds that there are acute quarry shortages expected in Melbourne, NSW’s Mid North Coast and South East Queensland, while steel imports are increasing because Australia’s steel production capacity cannot meet demand – with a 20 per cent increase in imports over the last two years compared with the previous two decades.

“Global supply chain pressures have eased for now, with steady improvements in international production, trade, and transport measures compared with 12 months ago,” Copp says.

“However, Australia’s lack of domestic capacity to supply building materials exposes investments to cost-overruns, delays and future global supply chain risks. It’s also much more difficult to understand the level of embodied carbon in imported materials.

“Currently, there is no method for collecting or analysing data on local manufacturing and production outputs at the national level, hindering the ability to predict supply and mitigate for shortfalls, as we can do with labour.”

The 2023 Market Capacity Report includes 14 recommendations for the Australian government to act in partnership with state and territory governments and industry to improve the demand-supply balance, and ultimately the long-term sustainability of the construction sector.

“Australia has an opportunity to build domestic capacity and markets for new low emissions construction materials, such as recycled materials,” Copp says.

“For major road projects, our modelling suggests that close to a third of conventional materials – 54 million tonnes annually – could be replaced with recycled materials.”

The report finds that Australia’s infrastructure workforce will need to grow by 127 per cent to meet demand. It is the third year that Infrastructure Australia has reported significant labour shortages.

“We urge governments to work together and with industry to address this structural workforce shortage. While broad skills and workforce reforms are underway nationally, we need to urgently boost the pipeline of workers into the sector and develop a national infrastructure workforce strategy,” Copp says.

To read the full report, go to: www.infrastructureaustralia.gov.au/infrastructure-market-capacity-program

Image credit: Jana Schönknecht / Adobe Stock

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