With the prospect of a significant revival in construction for most Australian markets through 2010 as local and international general economic activity increases, the prospect of skilled labour shortages looms for the building industry after the release of the latest population figures.

That’s the view of international property and construction consultants Davis Langdon after reviewing the latest Australian Bureau of Statistics population figures.

Davis Langdon’s Senior Economist and National Research and Development Manager, Dr Andrew Wilson said that population growth is a significant issue within the Australian Government policy context.

He said that, while the political debate in recent days had shifted to a population containment focus, strong arguments remain for an active skills-based migration program supplemented by a significant contribution to training by all Governments.

“These recent figures point to a looming problem and we expect the debate about Australia’s overall population and migration position in the decades ahead to continue,” he said. “The containment focus stems from concerns for resource conservation, but our ageing and retiring population presents funding challenges for the Government in the decades ahead as the tax take shrinks.”

The latest ABS figures show total 2009 population growth of 2.0% compared to 2.2% in 2008. Net overseas migration has decreased from 301,200 in 2008 to 277,700 in 2009.

Dr Wilson said employment vacancies are already diminishing and upward pressure on salaries and wages is emerging, particularly in Victoria and Western Australia.

“These latest figures point to a labour shortage as we move forward,” he said.

“It is contingent on policymakers to implement proactive skills development and distribution initiatives from both local and overseas sources to avoid the spectre of serious supply-side constraints and associated construction cost breakouts.”

Dr Wilson said Western Australia and Queensland remained the fastest growing States with annual increases of 2.7% and 2.4% respectively. Victoria grew by 2.1% annually with New South Wales growing by only 1.6% and South Australia by 1.3%.

“Queensland, Western Australia and Victoria recorded increases in net interstate migration with 13,500, 2,300 and 1,800 persons respectively added to those States,” he said.

“With the prospect of accelerating construction activity throughout 2010 and 2011, unsustainable pressure will mount on building costs and labour efficiency with serious downstream consequences for the general economy.’

“This is very important and needs to be considered within the current long term population debate,” he said.

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au