Earthmoving Industry Insight, Opinion

Queensland infrastructure projects set to boom

Queensland infrastructure projects are on the rise, but a skills shortage could hold the state back from developing to its full potential, one leading analyst says.

Queensland is due to see a surge in major infrastructure projects in coming years, focusing on roads, bridges and railways

Major infrastructure projects across Queensland will increase sizeably over the next few years, Construction Skills Queensland (CSQ) director Robert Sobyra says, in what will be a boom period for the construction sector.

Speaking at the 2021 Civil Contractors Federation (CCF) Queensland State Conference in Brisbane in October, Sobyra celebrated the change, but also issued a warning regarding the labour shortages faced within the industry.

CSQ modelling reveals there is a 45 per cent increase in the number of major projects across the state this year, compared to figures from 2019.

The modelling mapped the 6,000 major projects across Queensland, regardless of whether they are underway or still in the initial stages of planning.

“Realistically, around 4,500 of those projects have a chance of coming out of the ground in the next few years,” says Sobyra.

“There is no shortage of construction demand going forward.”

The boom in infrastructure projects is driven by a strong pipeline of engineering and heavy civil construction work and has been underpinned by vast investments by the Queensland state government.

The Palaszczuk administration was the biggest spender in the public sector and had continually committed a considerable allocation in its capital expenditure budget for heavy and civil construction projects across the state.

In fact, Queensland’s capex budget, which covers projects such as roads, bridges, schools, and hospitals, has grown from $10 billion in 2018 up to around $15 billion today.

“There has been a huge run-up in the budget that the Queensland government is allocating every year to capital expenditure,” says Sobyra.

“It’s really quite extraordinary and it’s not just a one-year blip, this is every year they are doing this, so the projects get accumulated.

“There is quite a significant run-up since around 2011, where infrastructure was about 10 per cent of the capex budget. Now, it is up around 70 per cent.

“It’s really going to hit the ground next year and in 2023 and into 2024.”

Projects such as Brisbane’s Cross River Rail, where construction is already underway, as well as the Urannah Dam project in North Queensland and Inland Rail, which will connect Toowoomba and Brisbane, are set to commence construction soon and are among the major projects Sobyra says will boost the state’s construction sector.

So, too, will the 2034 Brisbane Olympics, which will likely require more significant infrastructure over the next decade.

Of the major projects expected to break ground over the coming years, most relate to roads, bridges and railways, as opposed to hospitals and schools.

Skills shortage

However, Sobyra says the high level of infrastructure projects could wane on the labour shortages faced by the construction sector, particularly with so many railway building plans in the pipeline.

Between the finish of the Cross River Rail and commencement of Inland Rail, there is approximately a one-year overlap.

“There’s going to be a lot of rail building in the next few years. I’m not sure we have enough people who know how to build rail roads in the state; I think it’s going to be a real issue,” he says.

CSQ data has highlighted a disparity in the unemployment level in the industry and the continual demand for labour to fulfill projects – something that Sobyra says will have ramifications in many ways.

“What the data shows you is that unemployment in the industry is now below three per cent. That is simply unheard of,” he says.

“Job advertisements, while we have unemployment that low, are still rocketing. So, what that means is employers in our industry are desperate for talent, they are hiring their backsides off, and yet there is no-one there to hire because everyone is already in a job.

“They’re plumbing a dry well.

“Now, that can only have two effects – the first main effect is that it pushes up prices and pushes up wages. The second is that it delays projects and that’s exactly what they’re seeing in the home building space.”

Shortages in the labour force has been driven in large by restriction on migration both domestically and internationally, where Queensland’s hard borders have made it difficult for workers to enter the state from abroad across the past 18 months.

In normal circumstances, around 10 per cent of the construction workforce is from interstate or overseas. However, due to the pandemic, such a reliable resource for labour ceased.

But while it is expected that borders will reopen and restrictions will ease over the coming months, companies can be far more proactive to meet labour demands through hiring more apprentices.

In the building space, a purple patch of home building following the federal government’s home builder scheme and cheap interest rates has caused the sector to reach a pinch point for labour. As a result, there has been a sharp increase in the number of apprentice commencements across the past year.

“The building sector has gotten into it big time. Building is obviously facing pinpoints much more acutely than the civil sector and they have responded very quickly and have had an absolute enormous run up in apprentice commencements,” says Sobyra.

“Now is the time to start making our own workers out of our own young people.

“I reckon now is the time to do it because the civil construction industry will be where building is now.”

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