Civil construction jobs rise

Fly-in, fly-out workers in Western Australia are likely to take up tools in Queensland; more struggling farmers will leave the agricultural sector for construction jobs; and salary packages are set to increase.

These are among the findings of business research group BIS Shrapnel in its new report, Engineering Construction in Australia 2010-11 to 2024-25.

The analyst forecasts strong growth for civil construction on the back of a surge in mining and liquefied natural gas projects. Civil work is tipped to increase by 20-25 per cent over the next two to three years.

Adrian Hart, senior manager of BIS Shrapnel’s infrastructure and mining unit, says employers are feeling the squeeze of the skills shortage and that is translating to fatter pay cheques for civil construction workers.

“There’ll be, no doubt, higher wages as everyone’s bidding for the scarce skilled labour that there is,” he says.

The report predicts people working in sectors such as retail and agriculture may be lured into civil construction employment because of the higher wages.

“If you’re in agriculture, it’s been a bit of a tough period alternating between droughts and floods,” Hart says. “A lot of farm labour often gets attracted into mining and down the track into construction.”

Residential construction workers are also moving into the civil sector to meet demand.

BIS Shrapnel reports that civil construction work has grown from a $42 billion industry in 2005 to about $78bn last year. Hart argues that it is hard for the industry to meet employment needs, given such strong growth. Compounding the dilemma is that some states (Queensland, for example) and sectors (rail, road and water) will grow more than others.

“There’s a headline figure, which shows that growth is going to be 20 to 25 per cent over the next two to three years, but when you look behind that, there’s actually quite substantial variations by sector and state,” Hart says.

The much-discussed skills shortage is likely to affect projects in a few years and may even delay some start dates.

“Two or three years down the track at the peak of the next cycle of mining works, it may be extremely tough to get the labour,” Hart says. “It’s still an extremely tight market and one where people really are scrambling to get labour to do a lot of the work.”

At the same time, there is also excitement among civil construction workers about some of the bigger projects in the pipeline.
“If you’re in the engineering field, some of these projects are massive. They’re quite spectacular, so they have quite substantial requirements and that is a real challenge for people working in those industries,” Hart says.

In Queensland, flood reconstruction work, including repairs to utilities networks such as telecommunications, railways, roads, electricity, gas and water, is expected to add $3bn a year to the industry for the next two years.

“That’s a 10 per cent boost to civil construction activity straight away,” Hart says. “But what’s going to sustain Queensland going forward is that (the state) is home to some of those massive LNG projects and coal projects that require a whole lot of work. We’re talking billions of dollars a year.”

Most of these projects are around the Bowen Basin region north of Brisbane. In other states, South Australia has been thriving over the past couple of years, but Hart says that may slow down as projects such as the Northern Expressway and Adelaide desalination plant are completed. Growth in South Australia is now reliant on the expansion to BHP Billiton’s Olympic Dam mining project, set for a start in 2013.

“If that does get started, you’ll quickly see another boom in construction work in South Australia because Olympic Dam not only requires mine construction, it also requires port works, rail works, probably another desalination plant and a whole lot of road infrastructure. It will generate its own civil construction boom, just that project alone.”

The BIS Shrapnel report suggests growth in NSW will slow down in the next few years after a busy run with projects such as the port expansions at Botany Bay and Newcastle. Civil construction in Tasmania is expected to grow, with projects including the National Broadband Network, the Musselroe and Cattle Hill wind farms and the Gunns pulp mill. Victoria will decline slightly as work on the Wonthaggi desalination plant finishes.

The report says the Australian Capital Territory is “soaring” on the back of the Cotter Dam and other water projects, but they will finish soon and growth will then decline.

Western Australia should expect growth, but not at the same pace as Queensland. Hart suggests some fly-in, fly-out workers in WA may be tempted to take jobs in Queensland because of better lifestyle options. “There are some nice areas in Queensland to work if you want to work,” he says.

“It’s a bit more bearable than if you went to some of the more remote regions of WA.”

Hart says some of the LNG projects in Queensland are so big they will require about 5000 workers. This includes electricians, machine and plant operators, administration and finance personnel and labourers.

“These jobs are so massive that they require huge management teams and administration, as well as all the skills on the ground.”

Article from The Australian, April 2011.