$71 billion worth of rail, road, energy and water projects are expected to be delivered in Queensland over the next five years, according to the latest Queensland Major Projects Pipeline report.
The new report released by Queensland Major Contractors Association (QMCA) and Construction Skills Queensland (CSQ), expects a growing pipeline of works for Queensland.
The report evaluates the current market outlook and medium-term major project construction pipeline across the state.
QMCA CEO, Andrew Chapman, said 2022’s major project pipeline has returned to levels not seen since the resources boom in 2012, but this one is more balanced with various projects across diverse industries and locations, minimising the risk of another boom-and-bust period.
“Across the sector, planned investment has increased, funded project activity has increased to over $37 billion, and the pipeline will peak in FY23/24 with a predicted investment of $19 billion,” Mr Chapman said.
“As a sector, we are confident that the pipeline will continue to grow as new opportunities become realised, particularly across emerging energy sectors as hydrogen, rare earth minerals, and renewables projects receive funding and approvals, and defence investment increases to support new strategic partnerships.
“And that is before we factor in projects that urgently need fast-tracking to support the 2032 Olympic and Paralympic Games.”
Mr Chapman said it is also encouraging to see investment being made across the state and not just concentrated in the South-East.
“Regionally, Cairns ($1.2 billion), Townsville ($1.3 billion), Mackay-Isaac ($3.3 billion), Wide Bay ($1.1 billion), Darling Downs-Maranoa ($2.1 billion) have strong funded pipelines, benefiting from increased activity, particularly in resources, renewables, and future minerals projects,” Mr Chapman said.
Challenges ahead for infrastructure
However, while the report outlines a positive future for developing critical, economically beneficial infrastructure, it also identifies key challenges that must be addressed to efficiently deliver the infrastructure the state needs.
“Delivering the pipeline will pose challenges for the industry, government and private clients with capacity, capability, costs, and carbon major factors determining success,” Mr Chapman said.
“As a state, our pipeline is healthy, but it is vital to remember that we are competing for talent, materials, and resources on a national and international scale, with New South Wales ($112 billion) and Victoria ($144 billion) having significantly greater pipelines than Queensland.”
The four critical challenges to overcome are:
- Capacity: Sustaining and growing capacity
- Capability: Developing appropriate capabilities and skills
- Costs: Managing risks from cost escalation
- Carbon: Transitioning towards a low emissions industry and future
“Each of the challenges offers opportunities to reassess how we plan, fund, approve and deliver major projects,” Mr Chapman said.
“QMCA urges all parties in Queensland to adopt a transparent and collaborative partnership to ensure that projects are delivered on time, to budget and in a way that creates a sustainable industry that provides opportunities for us to attract and retain the skilled people we need to construct our future.
Mr Chapman said that a much-needed lift to productivity across the industry is critical.
“This is driven by greater adoption of digital technologies from design through to on site works, including automation, the use of alternative materials and products (including recycled materials) and fundamentally an industrial relations framework that enables improvements in the way we work safely and more efficiently,” Mr Chapman said.
“Regressing to pattern bargaining is a backward step in this regard.
“From collaborative contracting to utilising the Olympics as a vehicle to fast-track future investment, nothing should be off the table.
“We must link all discussions, activities and actions to driving productivity, which will minimise waste, improve performance and reduce long-term risks to public and private sector funding as well as minimising risk to the industry and supply chain.”
Addressing skill shortages
CSQ has used workforce modelling to estimate the workforce size and the nature of the skills needed to deliver the large civil pipeline.
CSQ CEO, Brett Schimming, said CSQ modelling indicates up to 16,200 construction workers could be required on average from now out to 2026/27, including skilled trades, professionals and unskilled labour.
“Most worker demand will be in regional and remote Queensland, accounting for an estimated 60 per cent to 80 per cent of the construction labour footprint,” Mr Schimming said.
Mr Schimming said the labour requirements for the future civil pipeline will hit an industry already experiencing extraordinary demand.
“Queensland’s civil construction sector is already facing a $16.3 billion portfolio of unfinished projects. This is the highest point since the mining boom ended, and 55 per cent higher than pre-pandemic levels, with most of this publicly funded,” Mr Schimming said.
“Despite demand soaring, civil construction employment remains 20 per cent below pre-pandemic levels, suggesting a current shortfall of at least 10,000 civil workers.
“The industry is experiencing significant labour shortages following the pandemic’s impact on migration.
“Tens of thousands of skilled migrants entered Queensland annually pre-COVID and thousands of these were then absorbed by the construction sector.
“These migrants are nowhere to be seen even since we’ve reopened – and we estimate we’re now missing around 130,000 skilled workers in Queensland since the pandemic began.
“We can no longer rely on these flows in future; it’s time to explore more sustainable strategies like ‘growing our own’ talent.”
To download and read the full report, visit the QMCA website here.
