by Chris Melham, Chief Executive Officer, Civil Contractors Federation (CCF) National
In May/June 2022, Civil Contractors Federation National (CCF) undertook a nationwide survey of its members to better understand the skills and capacity challenges facing the civil infrastructure industry to ensure CCF can respond appropriately at a national level.
The CCF Infrastructure Market Capacity Survey was undertaken against the backdrop of an increasingly unstable international economy which is impacting the domestic economy, including higher input prices and a shortage of materials. CCF also undertook the survey at a time of unprecedented growth in infrastructure projects at the federal, state and local government levels.
Results of the survey will be provided to the Federal Government, including its independent advisor Infrastructure Australia, which is currently developing its second Market Capacity Report due for release later this year.
CCF’s online survey, which was undertaken in each state and territory, focused on obtaining industry data across three key areas:
♦ The market capacity of the civil construction industry
♦ The civil construction industry’s ability to undertake additional projects now, and into the future
♦ Any resource constraints affecting civil construction companies
Rescaling, not reducing
The results of the survey make for interesting reading. They confirm that more than half of the companies surveyed could take on additional work, and that more than three quarters of companies could ‘scale up’ to meet additional work within six months.
To maximise this capacity, however, governments need to bring to market a greater number of small to mid-sized infrastructure projects, including in rural and regional Australia.
‘Rescaling, not reducing’, and smoothing of the infrastructure pipeline, are significant survey outcomes. Now more than ever before, in light of the current market conditions, governments need to disaggregate or de-bundle large infrastructure projects to facilitate greater participation from tier two and tier three head contractors.
On this point, CCF looks forward to working collaboratively with the incoming Federal Government on its ‘Buy Australian Plan’, which recognises the importance of infrastructure procurement reform to increase Australia’s sovereign capability.
This important policy, which CCF backed prior to the election, acknowledges the economic benefits of breaking up large contracts where possible to allow tier two, tier three, tierfour and smaller SMEs an opportunity to bid for civil infrastructure tenders. This is consistent with findings of the House of Representatives Standing Committee on Infrastructure, Transport and Cities’ report Government procurement: A sovereign security imperative.
The survey also found that price escalation is a growing concern for industry, which reinforces CCF’s argument that industry should not be expected to bear a disproportionate burden of unavoidable price escalations. CCF believes there needs to be a greater level of collaboration between industry and government for both parties to take on a proportionate level of risk.
The survey also highlighted concerns with red tape, such as slow environmental approvals, as a major concern for industry, and one which is hindering efforts to meet a growing infrastructure pipeline.
Skills shortage the number one issue
The most significant finding of the survey, however, related to the availability of skilled tradespeople and professionals. Survey respondents were asked to rank a number of threats to the delivery of infrastructure projects, ranging from the availability of products such as precast concrete products and sand or quarry products, through to the availability of skilled and unskilled labour.
In each state and territory, the highest ranked issue was the availability of local skilled tradespeople and professionals to undertake construction projects. This finding provides clear evidence that urgent action is required in a number of key areas.
Currently, civil employers, apprentices and VET providers are significantly disadvantaged as they continue to be omitted from Federal Government skills and training programs. Civil occupations need to be accurately reflected on the Australian New Zealand Standard Classification of Occupations (ANZSCO), which is an important step towards addressing skill issues.
This will enable civil occupations to be included on the Australian Apprenticeship Priority List and therefore eligible for funding under the Australian Apprenticeships Incentives Program. Action in this area is a critical first step in addressing the looming skills crisis facing the civil construction industry.
The Australian Bureau of Statistics is currently reviewing the ANZSCO, including a targeted update of construction-related trades occupations. This provides an excellent opportunity to improve the accuracy and coverage of how these occupations are described in ANZSCO, which in turn will support industry’s efforts to attract, retain and skill up the industry’s future workforce.
Action needed now
Failure to act however will impact on industry’s ability to efficiently deliver Australia’s growing civil infrastructure pipeline, including our roads, rail, bridges, pipelines, drainage, ports and utilities.
More broadly, the findings of CCF’s survey highlight the need for closer engagement and collaboration between industry and governments to address ongoing infrastructure investment and policy reforms.
As such, CCF will continue to push for a federally-led infrastructure consultative body that provides a seat at the table for industry and government to work collaboratively in addressing the many challenges facing the sector, including procurement reform, the rising cost of materials, skill shortages, and the efficient delivery of Australia’s infrastructure pipeline.
From CCF’s perspective, one first item of business for this consultative body should be an analysis of the results of the CCF Infrastructure Market Capacity Survey and a development of strategies to help, not hinder, the sector’s ability to contribute to Australia’s economic growth and capacity.
The CCF Infrastructure Market Capacity Survey is available on the CCF website www.civilcontractors.com
