Restructuring the Australian Construction Industry and Workforce: Implications for a Sustainable Labour Supply

By Toner, Phil | The Economic and Labour Relations Review : ELRR, September 2006 | Go to article overview

Restructuring the Australian Construction Industry and Workforce: Implications for a Sustainable Labour Supply


Toner, Phil, The Economic and Labour Relations Review : ELRR


1. Introduction

This study examines shifts in the industrial and workforce structure of the Australian construction industry over the last three decades and examines their effect on the capacity of the industry to meet its skilled vocational labour requirements through training. The principal variables examined are changes in the industry, firm size, demographic structure and occupational structure of employment in the construction industry as well as changes over time in the qualifications of people employed in the industry. The primary focus of the paper is on-site 'vocational' occupations, that is, those occupations that require the acquisition of an Australian Qualifications Framework level III, or lower, credential as an entry point for employment in the industry. These occupations comprise the majority of jobs in the industry. Public policy concern regarding skill shortages has largely been restricted to these occupations, most notably the trade group (DETYA 2001; Toner 2003; MBA 2005). The object of the paper is to examine the implications of changes in the industrial and workforce structure of the construction industry for the sustainability of a trained, qualified, on-site labour supply.

The construction industry is a key supplier of investment goods to the economy. Construction of new buildings and structures, and maintenance of existing structures, account for half of total investment in Australia (ABS 2004a: Table 63). Persistent shortages of suitably qualified on-site labour have a significant effect on the quality of output and capacity to introduce product and process innovation in construction (Construction Industry Training Board 2001:33). There are also large differences, within and across advanced countries, in the productivity and capital intensity of construction production methods between on-site construction workforces which have a high level of formal qualifications and those with a low level of such qualifications (Clarke and Wall 2000; Harvey 2003; Philips 2003:176-179). Ensuring an adequate quantity and quality of skilled labour is, therefore, a key factor in the efficient supply of buildings and structures in Australia. This paper is intended to contribute to the analysis of, and public policy response to, the sustainability of labour supply in the Australian construction industry.

The study explains changes in the industrial and workforce structure by reference to shifts in the intra-industry and inter-industry distribution of employment; the reduced role of the public sector in the industry; changes in the role of large firms from having a direct engagement in the construction process through the employment of a large direct work force to one primarily of project management, developer and marketer; and by changes in technology and consumer tastes. These variables are prominent in comparative international studies of the construction industry (BLO 2001; Bosch and Philips 2003) as well as in the labour economics literature on the determinants of employer investment in training (Ball and Freeland 2001). It is concluded that changes in the industrial and workforce structures are imposing significant barriers to the industry's capacity to meet its skill needs through employer investment in training.

Section 2 describes the principal data sources and methodological issues in using Population Census data with an interval spanning two decades, before proceeding to a detailed analysis of the construction industry. Section 3 compares and contrasts the principal changes in labour force structure of the industry with those occurring across the whole economy. Section 4 examines changes in the occupational and industrial structure of the industry. Finally, Section 5 draws out the implications of these changes for a sustainable labour supply for the industry.

2. Data Sources and Issues

The primary data sources used in this paper are the Australian Bureau of Statistics Population Censuses for 1986 and 2001. …

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