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IA forecasts shortages for infrastructure boom

IA forecasts infrastructure boom

IA is an independent government advisor providing research to support decision makers in better understanding the capacity of the market, and to deliver the forward infrastructure pipeline. 

IA predicts that by mid-2023 more than 105,000 jobs could go unfilled as governments attempt to deliver big infrastructure agendas over the next five years. 

In the wake of COVID-19, the Major Public Infrastructure Pipeline was devised to support economic recovery, increase productivity, and realise better outcomes across communities. 

Australian governments have committed to an unprecedented wave of infrastructure investment across transport, utilities and social infrastructure, with an expected $290 billion investment planned over the next 10 years. 

However, industry confidence for its capacity to deliver against increased activity could indicate potential capacity limits on efficient growth. 

IA chief executive Romilly Madew said the report is an Australian first, and a new data capability for the organisation. 

“This record investment creates new opportunities for local business and employment, however also risks constraints in the capacity of the market to meet this growth in investment,” said Madew. 

Transport projects represent 74 per cent of the activity projected over the next five years, with tunnelling projects representing a share of the Major Public Infrastructure Pipeline. 

Forecast specialty plant growth
Graph courtesy of Infrastructure Australia

Aggressive growth in specialty plant may pose risk if unmitigated, the report reads. 

Specialty plant includes heavy cranes and tunnel boring machines, which are often difficult to source and are typically controlled and operated by specific organisations and individuals. 

Unavailability in specialty plant has been a risk in other periods of high demand, often resulting in costly outcomes and delays. 

“Australia is currently experiencing a record level of investment in infrastructure,” the report reads. 

Known investment will peak at $52 billion in 2023, and an average annual growth rate to 33 per cent outstrips industry’s confidence in its capacity to deliver on-time and on-budget. 

Shortages are expected in skill, labour and materials, with demand expected to be two-thirds higher than the previous five years. 

“Meeting this demand would require annual growth of 25 per cent over the next two years, which is more than eight times higher than the projected annual growth rate of 3.3 per cent,” the report said. 

Madew said that a coordinated project pipeline could manage capacity constraints and provide confidence and certainty for industry and government. 

“While infrastructure investment is rightfully a key component of our national COVID-19 recovery, we need to ensure we are equipped to deliver this once in a generation infrastructure spend.” 

This inaugural report represents the first phase of work in Infrastructure Australia’s ongoing Market Capacity Program that will monitor and report on the capacity of the market.

A second phase of the Market Capacity Program is now under development for publication in the first half of 2022.

For more information visit the Infrastructure Australia website. 

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