Skills shortages, stagnating productivity and rising costs are challenging the delivery of Australia’s infrastructure needs as governments work to address the nation’s housing crisis and energy transition, analysis by Infrastructure Australia has found.

Infrastructure Australia’s 2024 Infrastructure Market Capacity Report shows the nation’s $213 billion five-year Major Public Infrastructure Pipeline—representing nearly a quarter of the country’s total $1.08 trillion of construction activity—is growing across energy and social infrastructure projects.

After a decade of record investment flowing into major transport projects, investment has now dropped $32 billion to make-up a total $126 billion of the pipeline, while buildings and utilities have grown to $71 billion and $16 billion respectively.

“This recalibration in investment is due to some governments coming off of significant investment in transport projects and changing focus to addressing the housing crisis and transitioning to a net zero future,” Infrastructure Australia Chief Executive Adam Copp said.

“The nation’s infrastructure ambitions continue to be challenged by skills shortages, stagnant productivity growth, and rising material costs.

“Construction materials on average cost around 30 per cent more than they did three years ago and with ongoing skills shortages we simply don’t have the people power we need to get the job done on time—our analysis shows seven per cent of the pipeline, or $15 billion of planned construction work, has been hampered by project delays.”

Infrastructure Australia’s analysis shows there will be a six-fold increase in renewable energy projects across all construction activity in Australia over the next five years, highlighting the drive of both governments and the private sector in this space.

“As this investment in renewable energy increases, both governments and the private sector should plan for the logistics and enabling infrastructure needed to support those projects,” Mr Copp said.

“Equipment such as wind turbine blades can measure up to 70 metres in length and seven metres in diameter—we need to ensure we not only have the resources to deliver these projects, but also the enabling infrastructure required to get the resources to where they are needed.”

Mr Copp highlighted that as the portfolio of projects is changing, there is also a shift in the location of projects towards the country’s north and to regional areas.

“We are seeing the Northern Territory and Queensland’s pipelines growing by a total $16 billion, while NSW and Victoria’s pipelines have decreased by a total $39 billion,” Mr Copp said. 

“The biggest challenge that comes with increasing activity in regional areas is how to attract workers as well as get the materials needed to complete these projects.”

Meanwhile, productivity growth in the construction sector has stagnated for more than three decades while other sectors by comparison have advanced, Mr Copp said.

“In order to attract new workers to the industry and retain the ones we have, government and industry need to address the underlying cultural issues that are holding productivity back and driving people, particularly women, away from a career in construction.

“This should be an industry of choice, but the reality on the ground is it’s a harsh working environment—we see burnout, stress, and incredibly poor mental health and wellbeing.  

“Addressing culture will be critical to ensuring we can deliver the nation’s infrastructure priorities.”

To read more about the 2024 Infrastructure Market Capacity Report and Infrastructure Australia’s Market Capacity Research program, visit infrastructureaustralia.gov.au. 

FAST FACTS:

• Nation’s five-year Major Public Infrastructure Pipeline stands at $213 billion—this is made up of government projects valued at over $100 million in NSW, Queensland, Victoria and Western Australia, and over $50 million in the ACT, Northern Territory, South Australia, and Tasmania.
• Major transport infrastructure is coming off a massive ten-year boom and dropping by $32 billion, while utilities and buildings infrastructure are increasing by $14 billion combined.
• Material costs remain high having increased on average 4.3 per cent on the past twelve months and are on average 30 per cent higher than they were three years ago.
• Productivity levels in the construction sector have continued to stagnate, influenced by a poor working culture of excessively long hours, little flexibility and incredibly limited workforce diversity among other factors. 

Media: 0492 488 444 | media@infrastructureaustralia.gov.au