Once-in-a-generation infrastructure spend may create capacity risks

Karyn Starmer 25 October 2021 6
Infrastructure Australia CEO Romilly Madew

Infrastructure Australia CEO Romilly Madew. Photo: Infrastructure Australia.

Infrastructure Australia has published its first Infrastructure Market Capacity report, forecasting a surge in demand for skills, labour and materials due to the rapid increase in public infrastructure investment.

The report focuses on 634 major public infrastructure projects across transport, utilities and building, and includes 430 projects worth $218 billion to be completed by 2025.

Most of the investment will be in the transport sector – primarily in road and rail – with transport consuming 80 per cent of all resources, according to Infrastructure Australia.

Responding to a request from the Council of Australian Governments, Infrastructure Australia will regularly report on the capacity of the market to deliver on the record investment pipeline.

This first report underscores the need for Australia’s governments and industry to work collaboratively, to advance sector-wide reform, and reduce the risk of cost escalation and delays in the delivery of major infrastructure projects.

“The Infrastructure Market Capacity report is an Australian-first and a new data capability for Infrastructure Australia,” says Infrastructure Australia CEO Romilly Madew. “It provides a level of visibility of the major project pipeline and resulting demand for skills, labour and materials that governments have not had until now.

“Major public infrastructure activity will approximately double during the next three years, peaking at $52 billion in 2023. This record investment creates new opportunities for local business and employment, however it also risks constraints in the capacity of the market to meet this growth in investment.

“In mid-2023, employment in the infrastructure sector will need to grow from 183,000 people today to more than 288,000 with the potential shortfall in jobs being filled forecast to exceed 105,000, with one in three jobs advertised going unfilled. This presents an opportunity for further employment, but there is also a risk these roles will be unfilled.”

Among the key findings, the report forecast an average annual growth rate of 33 per cent as industry reports reduced confidence in their capacity to deliver on time and on budget.

Industry indicates high confidence of delivering 10-15 per cent annual growth, but low confidence in delivering growth above 18 per cent, while demand for plant, labour, equipment and materials will be two-thirds higher than the previous five years.


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During the next three years, it is expected there will be 120 per cent average growth in demand for materials, 125 per cent growth in demand for equipment, and 140 per cent growth in demand for plant.

The peak of demand for skills is forecast to be 48 per cent higher than supply. Meeting this demand would require annual growth of 25 per cent during the next two years, which is more than eight times higher than the projected annual growth rate of 3.3 per cent.

Thirty four of the 50 public infrastructure occupations identified are potentially in shortage.

“This research further underscores the need for a coordinated project pipeline to manage capacity constraints and provide confidence and certainty for both industry and government,” said Ms Madew. “While infrastructure investment is rightfully a key component of our national COVID-19 recovery, we need to ensure we are equipped to deliver this once-in-a-generation infrastructure spend.

“The challenge of driving a step-change in infrastructure productivity and innovation is a shared one. It cannot be solved by governments or industry alone.”

Infrastructure Australia’s role is to work collaboratively alongside government, industry and the community to provide advice on the reforms and investment needed in the infrastructure sector.

A second phase of the Market Capacity Program is now under development for publication in the first half of 2022.


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6 Responses to Once-in-a-generation infrastructure spend may create capacity risks
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kenbehrens kenbehrens 3:18 pm 25 Oct 21

Isn’t bringing forward future infrustructure builds going to create a construction vacuum down the track?
The other issue of course is that it’s all funded by debt. Yeah, interest rates are historically cheap, but increases before retirement if that debt could be an issue!

shannos shannos 3:11 pm 25 Oct 21

Too much emphasis on infrastructure and construction which is cyclic transient employment relying on developers growth model. The myth of supply relating to demand and continuous capital gain growth has been busted during Covid- no migration but a 26% increase in property prices. Too many developers and investors chasing capital gains. What we need is more long term employment and a diversified economy, more local industry and manufacturing jobs to return and provide more opportunities for employment in a range of industries and skills. The ACT government relies on easy revenue from construction, hence a developer driven planning minister and department at the expense of environment, heritage and community well-being.

Stephen Saunders Stephen Saunders 10:39 am 25 Oct 21

If you look at the Board of IA, it is stacked with developer types, and everything that they release assumes the rapid resumption of mass migration, which of course requires catch-up infrastructure.

In our language, we refer to this as a “dog chasing its tail”.

    shannos shannos 2:49 pm 25 Oct 21

    Too much emphasis on infrastructure and construction which is cyclic transient employment relying on developers growth model. The myth of supply relating to demand and continuous capital gain growth has been busted during Covid- no migration but a 26% increase in property prices. Too many developers and investors chasing capital gains. What we need is more long term employment and a diversified economy, more local industry and manufacturing jobs to return and provide more opportunities for employment in a range of industries and skills. The ACT government relies on easy revenue from construction, hence a developer driven planning minister and department at the expense of environment, heritage and community well-being.

    shannos shannos 3:09 pm 25 Oct 21

    Exactly, investors chasing capital gains and creating a self -sustaining ponzi growth model at the expense of our younger generation who are now priced out of the market unless their families have played the negative gearing Land Lord game at an earlier time. There needs to be a form of indexation with increased stamp duty or property land tax when you have more than three properties to fund government backed low income housing as we use to have. This will hopefully disincentivise the investors. Designs should have appropriate energy efficiency and green space rather than the rubbish offered up as green wash in the new outer suburbs-gutter to gutter hot boxes and even steel frames now because we don’t grow enough timber now locally.

    retep retep 8:43 pm 25 Oct 21

    Erm, Infrastructure…

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