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This article discusses the movement of labour resources to the mining sector and the possible impact this will have for the lack of skilled labour currently in the construction sector. It also discusses the resultant effect on cost/quality and time aspects of construction projects.
A new report* by the Mineral Council of Australia released in August has found that Australia’s mineral industry by 2015 will need to increase its workforce by 70,000 in order to cope with the continuing mining boom underway in Australia. The biggest requirement will be for an extra 27,000 tradesman and 22,000 semiskilled workers. These predictions do not include the labour needed in the construction industry and other industries supporting the mining industry, which could increase the demand for labour by up to 200,000. In order to draw and retain people in the mining industry, attractive remuneration and benefits packages will be a priority. The following table represents the predictions of total numbers of additional staff required by the year 2015 in the mining industry.
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Occupation in Mining Industry
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Total Number Additional Employees Required
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Labour & Related Workers
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6,378
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Tradespersons
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26,983
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Technical Employees
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4,153
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Professional employees
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7,660
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Managers & administrators
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2,390
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These predicted figures will cause increased labour shortages to the construction industry Australia wide as skilled and unskilled labour are drawn to the mining industry. As can be seen, not only will tradespersons be effected, but also professional employees like construction/project managers, engineers, consultants and contract management.
Mining companies are offering significantly higher wages and more programs to attract apprentices. In 2005, the strongest wages growth in Australia was in Western Australia, as miners were struggling to keep up with the huge global demand for resources.
The government, both Federal and Western Australian, are putting a lot of resources into attracting labour to the resource industry. The Federal Government recently announced an $830 million “Skills for the Future” training package, providing funding for an additional 500 engineering places at Universities, financial incentives to support mid-career workers undertaking a traditional trade apprenticeship, and an extension of the Australian Apprenticeships Incentive Programme to support training at the diploma and advanced diploma levels. Additionally, the WA Government has recently launched a $1.2 million advertising campaign aimed at reducing labour shortages in WA by targeting workers in the eastern states.
The value of investment projects being built in WA has jumped 66.1% in a year to be worth $31.2 billion in the September quarter with resource related projects accounting for two thirds of projects being built. Projects include a $2 billion gold mine expansion; a $1.5 billion gas field development; a $1.2 billion underground Diamond Mine expansion; and the $1.1billion expansion of a refinery.
What does this mean for the construction industry?
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Skilled labour and professionals will be lured to the mining industry;
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Construction industry will have to match remuneration packages to retain workers;
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Fees for pre-construction consultancy and design to increase due to lack of skilled professionals;
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Projects may take longer to complete due to labour (both tradespeople and consultant) shortages;
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Increase in fees and construction costs (due to labour shortages) may lead to some projects becoming economically unviable; and
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An increase in the use of pre-fabricated building forms to combat cost increases and meet the need for affordable housing.
Further Information
Please feel free to contact Tom Plenty, Bradley Beer or Brendan Farrugia if you wish to discuss the above further or require any additional information.
*Report released by Minerals Council of Australia – August 2006: Staffing the Supercycle: Labour Force Outlook in the Minerals Sector, 2005 to 2015.
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