As Australia grapples with a growing need for skilled labor to meet its housing, infrastructure, and renewable energy goals, new research has brought to light an alarming reality: a projected shortfall of 130,000 workers in the construction and trades sectors. This staggering shortage threatens to derail the nation’s plans to alleviate the housing crisis, develop critical infrastructure, and transition to sustainable energy sources.
With these findings, it has become clear that addressing this labor gap is not just about hiring more workers—it's about transforming the way the construction and trades industries operate, from improving apprenticeship completion rates to diversifying the workforce and leveraging skilled migration. If Australia is to meet its national priorities, these industries must undergo significant reforms to attract and retain the skilled labor necessary for building the future.
The Alarming Forecast: 130,000 Workers Needed to Meet Demand
The construction and building sectors are the lifeblood of Australia’s development. From housing to hospitals, schools to roads, skilled tradespeople are responsible for creating the infrastructure that sustains the nation. Yet, new research published by the Master Builders Association has forecast that the industry will face a shortfall of 130,000 workers this year alone, excluding any impact from attrition rates.
Denita Wawn, CEO of Master Builders Australia, issued a stark warning about the implications of this shortfall: “One of the biggest handbrakes on building homes, our roads, our hospitals, our schools at the moment is a shortage of workers. There’s about 1.4 million workers in our sector; we need well over 1.5 million to be able to actually do what we need to do to resolve the housing crisis.”
This shortage represents a critical bottleneck for the nation’s ability to meet urgent infrastructure needs. Australia is facing a housing crisis that has seen property prices and rent costs skyrocket, alongside increasing demand for healthcare and education infrastructure. Without enough skilled workers, these projects will continue to be delayed, exacerbating the crisis.
The Impact on National Infrastructure: Roads, Schools, and Hospitals at Risk
The shortage of 130,000 workers is not just a challenge for the construction of homes—it has much wider implications. Australia’s infrastructure, including roads, hospitals, and schools, is at risk of stagnation due to insufficient labor. Critical projects that underpin economic development and public welfare are facing delays, driving up costs and reducing the quality of life for Australians in need of these services.
With roughly 1.4 million workers currently employed in the sector, Wawn points out that a workforce of at least 1.5 million is required to meet the country’s immediate needs. This shortfall is having a ripple effect across the country. Roads intended to ease congestion, hospitals designed to serve growing populations, and schools needed to accommodate a rapidly increasing number of students are being held back by the lack of workers.
The Renewable Energy Dilemma: Shortages Threatening the Energy Transition
The issue of worker shortages extends far beyond housing and traditional infrastructure—it is now threatening Australia’s transition to renewable energy. With the federal government’s aggressive push to lower emissions and integrate renewable energy into the power grid, skilled labor in the energy sector is critical. Yet, as research from the think tank Per Capita indicates, the shortage of electricians and apprentices has become a significant hurdle in achieving these goals.
Emma Dawson, Executive Director of Per Capita, underscored the growing urgency of addressing the skills gap in renewable energy: “We have skill gaps across the economy, particularly in these essential trades.” Electricians, in particular, are in short supply, creating bottlenecks in projects meant to introduce solar and wind energy to Australia’s energy mix.
Without enough workers to install and maintain renewable energy systems, Australia risks missing its emissions targets and falling behind in the global race to transition to a sustainable energy future. This labor shortage has now become a national priority not just for construction but for the entire economy.
The Barriers Holding Back Apprentices and Women in Trades
While the need for workers is clear, significant barriers prevent many Australians from pursuing and completing trade apprenticeships. One of the most pressing issues is the low apprenticeship completion rate. According to government data, just 54% of apprentices completed their four-year programs in 2023, down from 55% in 2018. This drop reflects a system that is failing to retain apprentices and deliver the skilled labor needed to meet demand.
One of the key factors driving this low completion rate is inadequate wages. Apprentices often receive minimal pay while working long hours, making it difficult for them to support themselves. Unlike university students, who can take out loans to cover tuition and living expenses, apprentices rely on their wages to cover not only living costs but also the expenses related to their training, such as tools and transportation.
Furthermore, the industry’s entrenched gender imbalance has limited the potential labor pool. While women have made significant strides in many traditionally male-dominated industries, the building and construction sectors remain predominantly male. As of May 2024, only 13.6% of workers in the construction industry were female, with even lower representation among electricians.
Diversifying the Workforce: Addressing the Gender Imbalance
Increasing female participation in trades could significantly help address the skills shortage. Yet, traditional barriers, including long, inflexible work hours and the perception of trades as a male profession, continue to deter women from entering the industry. Denita Wawn has called for more initiatives aimed at encouraging women to pursue careers in construction and trades, including programs designed to provide better work-life balance and training opportunities.
Emma Dawson echoes this sentiment, pointing out that “Traditionally, some of the blue-collar unions have had enterprise agreements that require a 50-hour week. That doesn’t work for women.” For women with caregiving responsibilities, the long hours required in many trades jobs make it nearly impossible to balance work and family life.
To truly solve the skills shortage, the industry must become more inclusive. Expanding the labor pool to include more women not only makes good economic sense but also fosters diversity and innovation within the industry. By removing structural barriers and promoting flexible work arrangements, the trades sector can attract a broader range of talent.
The Role of Migration in Filling Immediate Labor Gaps
While long-term solutions like improving apprenticeship completion rates and increasing female participation are essential, the current labor shortfall demands more immediate action. In the short term, skilled migration may be the solution to filling the gaps in Australia’s construction and trades workforce. Australia has long relied on migrants to address labor shortages, particularly in essential sectors like healthcare and construction.
Denita Wawn has called on the government to implement a national apprenticeship strategy that supports wage subsidies throughout training and provides additional subsidies for accommodation and TAFE programs. However, as these programs take time to implement, skilled migrants will play a critical role in bridging the gap between demand and supply.
It is essential, though, that migration policies ensure fair treatment for workers, with appropriate wages, working conditions, and pathways to residency for those who contribute to Australia’s economy.
The Call for a National Apprenticeship Strategy: Securing the Future Workforce
Addressing the labor shortfall will require a multi-faceted approach, with both immediate and long-term solutions. One of the most pressing needs is for the Australian government to develop a comprehensive national apprenticeship strategy. Such a strategy would involve increasing wages for apprentices to ensure they are paid a living wage, improving the quality of vocational education, and providing apprentices with on-the-job training opportunities.
Emma Dawson points to the value of TAFE programs in providing high-quality education for apprentices: “We know TAFE courses have a better outcome than private VET colleges.” Research shows that apprentices who attend registered training organisations (RTOs) that involve industry stakeholders—such as unions—have higher completion rates than those attending private VET providers.
In addition to improving the apprenticeship system, Dawson has called for federal funding for renewable energy and housing projects to include conditions that ensure apprentices are treated well. This would include setting minimum standards for wages, mentoring, and on-the-job training, ensuring that the next generation of tradespeople receives the support they need to succeed.
A Way Forward: What Needs to Be Done
The skills shortage in Australia’s building and construction industry is not an insurmountable challenge, but it requires immediate and sustained action. Several key measures can help address the shortage and ensure that the sector has the workers it needs to meet future demand:
- Boosting Apprenticeship Completion Rates: Increasing wages, improving working conditions, and providing better access to quality vocational education are essential for ensuring that apprentices complete their training.
- Diversifying the Workforce: Encouraging more women to enter the trades industry through targeted programs and removing structural barriers will help expand the labor pool.
- Short-Term Solutions through Migration: In the immediate term, skilled migration can help fill the current gaps in the labor force while long-term solutions are implemented.
- Investing in TAFE and Vocational Training: Government investment in TAFE courses and public vocational training institutions will provide better outcomes for apprentices and ensure they receive the education and support they need to succeed.
- Implementing a National Apprenticeship Strategy: A coordinated national strategy that involves government, industry, and unions is necessary to address the root causes of the skills shortage and ensure that Australia has a skilled workforce for the future.
Australia’s growing labor shortage in the building, construction, and trades sectors presents a critical challenge—but it also offers an opportunity. By investing in vocational education, diversifying the workforce, and leveraging skilled migration, the country can begin to address the shortfall and meet its housing, infrastructure, and renewable energy goals.
The path forward requires a coordinated effort between government, industry, and educational institutions. A national apprenticeship strategy that increases wages, improves access to training, and ensures fair treatment for apprentices is essential for building the workforce of the future. At the same time, immediate action—such as expanding skilled migration—will help address the current shortfall and keep Australia’s infrastructure projects on track.
In the end, the labour shortage is not just an issue for the construction sector—it is a national priority. Without the skilled workers needed to build homes, roads, hospitals, and renewable energy infrastructure, Australia’s growth and development are at risk. By addressing this challenge head-on, Australia can secure the workforce it needs to build a sustainable and prosperous future.
