Infrastructure Australia’s initial Infrastructure Market Capacity Report predicts an increase in demand for resources because of the swift increase in public infrastructure investment.

The report is a response to a request from the Council of Australian Governments in March 2020 for Infrastructure Australia to report on the ability of the market to deliver on the record investment pipeline.

Its results emphasise the need for Australia’s governments and industry to partner to enhance sector-wide reform and lessen the danger of cost increase and delays in the completion of major infrastructure projects.

Infrastructure Australia Chief Executive, Romilly Madew, said that The Infrastructure Market Capacity report is a national first and a new data capability for Infrastructure Australia.

It provides a mode of visibility of the primary project pipeline and resulting and unprecedented need for skills, labour and materials.

Major public infrastructure activity will stand to double over the ensuing three years, peaking at $52 billion in the year 2023.

This record investment devises fresh opportunities for area business and employment, yet also impedes the capability of the market to match this growth in investment.

In mid-2023, the employment in the infrastructure sector must elevate from 183,000 people currently to more than 288,000.

Potential shortfall in employment positions being filled is forecast to surpass 105,000, with one in three jobs posted going unfilled. This provides a chance for additional employment, but the danger also exists that these roles will be unfilled.

Key report findings feature:

  • A forecasted average yearly growth rate of 33 per cent as industry reports lessened confidence in their ability to deliver on-schedule and in accordance with a budget.
  • Industry expresses confidence in the delivery of 10-15 per cent annual growth, but not in delivering growth more than 18 per cent.
  • Demand for plant, labour, equipment, and materials will see two-thirds of an increase than the last five years.
  • Throughout the next three years, it is predicted there will be:
    • 120 per cent average increase in materials demand
    • 125 per cent increase in equipment demand
    • 140 per cent upsurge in demand for plant
  • The peak demand for skills is 48 per cent more than for supply. Filling this demand would necessitate yearly growth of 25 per cent throughout the next two years, which is more than eight times more elevated than the projected yearly growth rate of 3.3 per cent.
  • 34 of the 50 public infrastructure occupations specified are possibly in shortage.

While infrastructure investment is a key part of the national COVID-19 recovery, we must guarantee that we can deliver this once-in-a-generation infrastructure spend, Madew said.

She says the key to this change in infrastructure productivity and innovation is shared, and can’t be solved by governments or industry by itself.

Australasian Railway Association (ARA) Chief Executive Officer, Caroline Wilkie, asserted the reports were an acknowledgement of this important issue.

Wilkie said that while skills shortages were complicated to solve, an instant focus on education and training to fill short and medium term needs would be a component of the solution.

In 2023, skills demand will be 48 per cent more than that for supply, with the transport infrastructure sector set to present the greatest need, Wilkie said.

Roads Australia (RA) CEO, Michael Kilgariff stated that the report supports main recommendations in RA’s September 2020 Procurement Reform Report, addressing long-term pipeline visibility, potential skills shortages and workforce culture issues.

Especially, RA has summoned the Federal Government to take the lead in the development and coordination of a national infrastructure pipeline, in partnership with other jurisdictions; thus ensuring an improved workflow and healthier work conditions.

The inaugural report concerns major public infrastructure pipeline (transport, utilities and building infrastructure), for investments exceeding $50 million for Tasmania, Northern Territory, and the Australian Capital Territory and $100 million for other states.

The Infrastructure Market Capacity Report embodies the initial phase of work in Infrastructure Australia’s continuing Market Capacity Program that will watch and report on the capacity of the market.

A second phase of the Market Capacity Program is now being prepared for publication in early 2022.

Source: Infrastructure Magazine

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