It appears that commercial construction activity has finally started to show improvement, bringing its growth somewhat in line with that being experienced in the residential construction sector in Oz.

According to reports activity in the nation’s construction industry is expanding at a rate faster than it has for nine years and housing construction seems to be at the forefront of this growth.

The Australian Industry Group/ Housing Industry Association Performance of Construction Index rose 4.1 points to 59.1 points in September. This was the third consecutive month which indicated an increase and the fourth during which the index remained above the 50 level (level that separates expansion from contraction).

According to Harley Dale chief economist of the Housing Industry Association, residential construction will probably strengthen further for the rest of the 2014/15 financial year. He was quoted as saying:

 “The commercial construction sector finally appears to be following the lead of new residential construction, which is another pleasing outcome,” he said.

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According to Dr Dale the increase in the supply of residential dwellings may serve to keep rising housing prices at bay. Prices had been driven up by the influx of investors interested in existing home purchases.

Last month Reserve Bank of Australia governor Glenn Stevens mentioned that changing regulations was a possibility in order to curb risky lending to property investors. Stevens warned that this could threaten banking stability and ultimately the economy as a whole.

Dr Dale went on to explain that evidence of expansion in t  v he construction industry should continue into next year for the sake of the economy,

 “It will be important for the broader economy that evidence of strong performance in residential and improving performance in commercial construction presents itself throughout 2014 and into next year,” Dr Dales said.

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While most economists are confident that the growth being experienced will be maintained into next year, other forecasts have determined that we are headed for a skills shortage in the construction industry, as supply of skilled workers cannot keep up with the housing and commercial construction demand.

Over the next five years experts say the government may have to allow more skilled tradespeople into Oz on 457 VISAs in order to meet the demand for skilled labour in the construction sector.

In order to minimise the impact of this shortage and to ensure that the shortage does not hamper the expansion of the industry, and ultimately the prosperity of the economy as a whole, we must address the skills shortage now but training new workers in the construction trades.

In our training of new workers and apprentices it is important that we remember before even beginning on-the-job training on construction sites, every worker should be in possession of a White Card.

A White Card is a small credit card sized card which indicates that a person is accredited to work on a construction site. It is nationally recognised and is a mandatory requirement for all workers across Oz who work on construction sites.

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