Queensland is facing major capacity challenges as it stares down a $92 billion five-year construction pipeline fuelled by energy transformation and the looming 2032 Brisbane Olympic and Paralympic Games.
The latest Queensland Major Contractors Association Major Projects Pipeline 2023 report says labour demand for large projects is expected to peak in 2027-28 at 43,703 workers.
This is a 78% increase from the required numbers in 2023-24, where there are already cost pressures from “too much work and not enough people to deliver it”.
“Ultimately, increasing demand for labour and skilled workers is now beginning to outstrip supply,” the report warns.
“With the investment in the Hospital Capital Expansion Program and the 2032 Olympic and Paralympic Games not yet hitting the ground, the situation will only become more challenging.”
Construction firms also face challenges finding adequate workforces in regional areas. Most renewable projects are in remote and regional areas. In other words, 70% of the labour demand for these projects will be in areas where people are hard to source.
Based on the predicted numbers, 2026-27 is forecast to be the strongest construction year in Queensland since the end of the resources boom in 2014-15.
The $92 billion current five-year major project pipeline is 29% higher than the forecast in the equivalent 2022 report.
If all currently unfunded projects in the pipeline are activated, there will be $22.9 billion in works in place in three years, higher than the 2012-13 peak ($19.1 billion).
While the forecasts are upbeat, currently the infrastructure boom is far from evenly spread across different regions of the state.
“The Ipswich-Toowoomba-Logan region was the only area to see a reduction in both the funded and unfunded construction activity over the next five years,” the report says.
“In contrast, the remainder of South-East Queensland experienced a rise in construction work done that is sufficient to offset the decline.”
On top of the labour challenges, the QMCA report paints a particularly sober picture of the cost equation for the construction sector.
It says that, despite the expectation by some that annual cost escalation would return to the 20-year annual Queensland annual average of 3.5%, so far there were no signs of that. In 2022 alone, the annual cost increase was 14.3%.
The cost index for roads and bridges alone is 7% higher than in 2022.
“While the cost of timber and steel has reduced significantly, materials such as sand, concrete, insulation glazing and floor coverings remain elevated,” the report says.
“So, the narrative that material costs have retuned to pre-pandemic levels is far from accurate.”
The 12th edition of the Major Projects Pipeline Report (2023) was compiled by QMCA in conjunction with Construction Skills Queensland, Oxford Economics and Aurora Marketing.
The report summary can be found at the QMCA website
