Sydney construction skill shortage attracting Queensland tradies

A shortage in critical trade skills in NSW is attracting migrants from across the state borders, says a new report.

According to the latest Q 3 2018 Property Market Insight report from Turner & Townsend, major construction activity in commercial, hotel and infrastructure sectors is reating opportunities for Queensland tradies.

The report says that skills at capacity or critical levels in Sydney include fit-out (carpet, painting, partitioning and joinery), services (mechanical, electrical and fire), façade (glazing and balustrades and structures (form work, concrete, and pre-cast concrete).

The report also outlines that while wages are rising in Sydney, they are drifting in Queensland.

In Sydney, form worker salaries have increased by 4%, precast concreters 3%, site foreman 16% and reinforcement 14%.

Meanwhile, in Queensland site foreman recorded a minus 4%, precast concrete and curtain wall glazing façade workers was down 3%, while reinforcement was up by 14% and form work 4%.

Source: Q3 2018 Property Market Insight report  

Simon Kearney, Director at Turner & Townsend said the report told a tale of two cities.

“The two cities are working at different paces which has opened up opportunities for Queensland tradies in the New South Wales market. Sydney remains the largest construction sector with $62 billion spent in the last financial year across building and engineering, reaching record levels,” he said.

“Construction work in all major sectors including commercial, infrastructure and hotels is at elevated or record levels which is providing strong job prospects for contractors and increased tender return prices in Sydney.”

“Prime office vacancy rates in Sydney are hovering around four percent indicating a tight market and creating ideal conditions for construction. White collar job growth is rising significantly on the back of a boom in financial services, real estate, engineering and tourism. Short term tourist arrivals of 3.4 million during 2017 – 2018 comprised 38% of the nation’s total, is driving growth in the construction of Sydney’s inner-city hotels.

“In addition, engineering construction in Sydney recorded over $23 billion in activity during the 2018 financial year. Most of the activity was road and rail which is expected to grow by another $1 billon to peak at approximately $12 billion during 2019/2020.”

“Despite all this growth, residential construction is now starting to slow. Housing prices have fallen by as much as eight% in 2018. The slowdown in residential construction is likely to take the heat out of trade labour costs, even if material prices are increasing strongly as a direct result of road and rail projects,” he continued.

“In comparison, Brisbane’s CBD commercial vacancy rates have blown out to 14% primary and 22% in secondary markets since the mining boom ended, negatively affecting commercial construction. Nevertheless, new commercial towers at 300 George Street, 360 Queen Street and a major refurbishment at 80 Ann Street are imminent,” he continued.

“Queens Wharf is emblematic of the changing face of Queensland construction with new projects catering for the tourism market rather than business. When construction starts in this area, demand for trades will increase significantly and will push construction costs up.”

“In the near future several infrastructure projects including Cross River Rail, Brisbane Metro Rail, the Queensland section of the Inland Rail project and the completion of the Kingsford Smith upgrade will spur activity in the state. These projects have the potential to draw Queensland tradies back home which will put more pressure on an already heated New South Wales labour market.”