Demand for skilled labor in Australian residential construction industry rose in quarter ending in September following 10 consecutive quarters of skilled labor surplus; economist says further improvements expected: Housing Industry Assn.

CAMPBELL, Australia , October 29, 2013 (press release) – The demand for skilled labour in Australia’s residential construction industry increased in the September 2013 quarter, said the Housing Industry Association, the voice of Australia’s residential building industry.

The HIA Trades Report, a quarterly survey of builders and sub- contractors, shows that the availability of skilled trades fell moderately during the September 2013 quarter, indicating an improvement in labour demand. Trade price developments were again benign with growth still slower than the rate of general inflation.

Commenting on the latest HIA Trades Report, Chief Economist Dr Harley Dale said “The availability of residential skilled labour has now been in surplus for ten consecutive quarters, but appears to have passed its peak.”

“More recently we have seen a first round new home building recovery taking hold and conditions have improved for a revival in renovations activity from a ten year low,” remarked Harley Dale.

“A moderate improvement in demand for skilled labour in the latest Trades Report update is consistent with this environment for residential building and we should see further improvements in labour demand in coming quarters,” Harley Dale said.

“The key will be to ensure adequate policy focus and investment in skills and training. Otherwise a structural shortage of skilled labour will hinder residential building activity, as was the case prior to the GFC,” concluded Harley Dale.

The HIA Trade Availability Index declined to +0.18 in the September 2013 quarter from a record high +0.24 in the June quarter. Any pressures evident in the HIA Trade Prices Index were generally still muted. The Trade Prices Index increased by 1.7 per cent over the year to the September 2013 quarter, lower than the current inflation rate.

“If what we are seeing now is the tentative beginnings of a residential building recovery, then we can expect to see some further modest declines in the availability of trades. The challenge will be to ensure that this doesn’t turn into a chronic shortage while we wait for adequately skilled labour to enter into the workforce,” said HIA Executive Director, Industry Workforce Development, Liz Greenwood.

Note to Editors

The HIA Trades Report is a quarterly measure of trade prices and availability on a capital city and rest of state basis for 13 different trade categories in the 5 largest states.

The data is sourced each quarter from a sample of HIA builder and contractor members. The price series is the current charge out rate minus GST and materials. The data is weighted and expressed in terms of an index (with a base of 100 being the weighted average price for all trades in all regions in September 2002).

The trade availability measure is derived from a question asking members about the availability of their trade in their particular region. There are five possible responses ranging from critical short supply to massive oversupply. A net balance method is used to derive the single measure.

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