Demand for construction workers in Western Australia could double within 12 months, putting pressure on wages and schedules, according to an industry analyst.
Demand for construction workers in Western Australia could double within 12 months, putting pressure on wages and schedules, according to an industry analyst.
Pit Crew Management Consulting Services founder Peter Dyball told Business News he anticipated about 11,000 construction labourers would be at work on WA projects by this time next year.
The number is based only on projects already approved, such as the Eliwana, Koodaideri and South Flank iron ore sustainment developments.
It represents an increase of roughly 40 per cent on current figures, and includes blue collar roles such as boiler makers, riggers and scaffolders.
But Mr Dyball said a series of further projects under consideration, as-yet undisclosed, could dramatically increase the need for construction workers, to as many as 17,000.
That would effectively mean WA businesses need to find about 9,000 additional workers within a year.
“It’s going to be very interesting in the next few months to see the response to the (higher) iron ore price,” Mr Dyball said.
After the 2020 peak of demand, there would be a further surge in around 2023, driven by LNG investments such as Woodside Petroleum’s Browse, Scarborough and Pluto train 2, he said.
Demand for engineers is also set to grow.
“Engineering … runs quite parallel to that, although the ramp-up is obviously a little bit earlier,” Mr Dyball said.
“We’ll probably see about a 25 per cent increase between now and the middle of next year; it could be, depending on FID announcements, almost double.”
There are about 4,000 engineers in WA currently working on projects, Mr Dyball estimated.
“The market is certainly tightening up on the engineering side of things,” he said.
“We can expect a shortfall in the engineering occupations starting from the beginning of 2020, right through to the end of 2022-23.”
Supplementing Mr Dyball’s analysis, data from the federal Department of Jobs and Small Business shows job vacancies for engineers increased about 7 per cent from May 2018 to May 2019.
Compared with May 2017, however, vacancies were up about 74 per cent.
Mr Dyball’s projections weren’t as high as the last boom, when the construction workforce peaked at around 35,000.
The big difference this time will be competition driven by much higher demand for workers on the east coast.
In NSW, there’s a sustained high driven by infrastructure projects, with other states also strong.
That might make it more difficult for WA to source workers from interstate, as had been the practice in previous booms.
“(Higher pay) might be the end result,” Mr Dyball said.
“As long as stakeholders and project owners understand that and are ready for it, (otherwise) it might hurt.
“If projects lock themselves in based on certain rate estimates and escalation, we’ll have some of the same scenarios pan out like we did between 2010 and 2012.
“Huge increases in costs ... schedule blowouts.
“It’s one thing to get people, it’s another thing to get qualified and experienced people to keep productivity up.”
