Workers Laid Off Despite Looming Skilled Labour Shortages

Staring down the barrel of a crippling 300,000 shortfall of skilled workers, a head-shaking scenario is unfolding in Australia’s construction sector. “For sure, there are major concerns around industry capacity going forward,” Australian Constructors Association chief executive Jon Davies says. “But perversely, right at this point in time, we’ve got members laying people off.” Flying in the face of the looming workforce crunch, the peak body blames delays in projects being brought to market for the staffing cutbacks. The ACA’s membership ranks include construction heavy-hitters such as Multiplex, Lendlease, Besix Watpac, Built, Laing O’Rourke and John Holland. “We’ve got this dip [in projects] that we’ve known was coming for some time,” Davies tells The Urban Developer . “And we’ve been saying to clients, if you’ve got shovel-ready projects now is the best time to come to market because there’s resources out there looking for a home. “But for whatever the reasons, those projects are not being brought to market and, as a result, there are issues out there at the minute with not enough work. “Of course, we know that’s absolutely not going to be the case in 12 to 18 months … that’s the crazy thing. It’s completely perverse.” ▲ Australian Constructors Association chief executive Jon Davies says now is the time to bring projects to market. Infrastructure Australia’s latest market capacity report has forecast a potential 300,000-worker shortage by 2027 for the nation’s construction industry as demand surges with housing, transport and energy infrastructure projects—not to mention the building program for the 2032 Brisbane Olympics. By its estimates, it is already down 141,000 workers on what is needed to deliver the country’s record $242 billion, five-year major public infrastructure pipeline. “The pipeline shows governments are doubling down on energy transmission and housing projects in a bid to meet their targets, while continuing to deliver the major transport projects we need to enable Australia’s productivity and liveability for decades to come,” Infrastructure Australia chief executive Adam Copp noted at the time of the report’s release in November last year. “This added demand will not come without challenges for the market—productivity growth remains sluggish, while worker shortages present a significant risk to the delivery of projects.” Meanwhile, the intervening spate of layoffs hitting the sector’s white collar workforce—including project management, engineering and commercial teams—threatens to exacerbate all of the above. Davies says in the next 18 months Queensland—with a record-breaking $116.8-billion infrastructure program aimed at long-term growth and housing supply as well as Olympic readiness and legacy—is likely to begin experiencing the country’s worst construction workforce shortages. As well, he says, South Australia will face similar issues as work on a new construction yard for building the country’s SSN-AUKUS nuclear-powered submarine fleet gains momentum, and shortages also are likely in Western Australia as construction works ramp up. In the interim, however, Australia’s contractors are navigating a polar opposite industry landscape—trying in earnest to find enough work to keep staff on because—as Davies puts it—“they know what’s coming”. “But, you know, when you’ve got tight margins it’s hard,” he says. “So just to hammer home the message, anyone who’s got a shovel-ready project now’s your chance. You will never get better pricing than currently.” ▲ Scott Hutchinson: the only way construction costs in the near future will go is up. Scott Hutchinson, chairman of Hutchinson Builders—Australia’s largest privately-owned construction firm—agrees. The only way is up again for construction costs in the near future given the significant pipeline of work ahead, he says. “Yeah, things have settled down for the moment and it’s a little bit quieter, which is a good thing and exactly what we needed from our perspective—it was completely overheated. “But we all know there’s trouble coming again.” For the first time in seven years Hutchinson Builders—also known as Hutchies—is back in the black, recording a $46.4-million profit in the 2025 financial year. However, $16 million of that pre-tax figure was from rent and interest, with the company making less than 1 per cent on its $3.34 billion of construction revenue. And although Hutchinson says the turnaround comes off the back of easing cost growth, in the same breath he warns they remain elevated and the pressure will be on prices again from 2027—particularly with works starting to take off on the building program for the Brisbane Olympics. ▲ A concept rendering of the planned Brisbane Stadium, centrepiece for the 2032 Olympic Games. “Last year’s results are in the right direction but they come off seven years of hell, bouncing along the bottom … and the industry is about to get overloaded again. Workers are going to be hard to get, trades are going to be hard to get and prices will go up again. “So it’s not anything we can really be calm about”. He points to the 40 per cent rise in building costs during an 18-month period in the post-pandemic construction boom. “Nobody can survive that as a builder and make money,” Hutchinson says. “It’ll be bad again this time but I don’t know if it’s going to be as bad as that. It could be 10, 20 or 30 per cent. “Nobody can really tell ... everybody’s just got to be very careful. You don’t want to be caught if all the subcontractors start going broke again. “So this year will be steady for us and we’ll just be trying to only do projects for good clients that we’re sure are going to go ahead and be successful.” Meanwhile, for the ACA’s Jon Davies, the first half of 2026 is shaping up as a challenging swansong. He will step down from the position at the end of June after a six-year tenure during which he has helped the industry negotiate many other twists and turns, including the tumultuous pandemic period. Hailing from Middlesbrough in the UK, Davies blames Lego for his lifelong passion for construction and says he fell into quantity surveying. At 26, he travelled to the United Arab Emirates, Singapore and Australia, settling in Brisbane in 2007, where he eventually took up the role as chief executive of the Queensland Major Contractors Association before moving onto the Australian Contractors Association. ▲ Australian Constructors Association chief executive Jon Davies is due to leave the role at the end of June. Davies says with a workforce crunch looming on the horizon he expects the industry will revisit some of the lessons it learned during Covid, moving from a traditional adversarial to a collaborative approach to projects. “There’s going to be a lot of competition … and anyone that wants to get stuff done is going to have to engage far more collaboratively with contractors as opposed to trying to pass risk on, because people will just not accept that risk transfer, particularly around resource availability.” He regards having a degree of success in bringing the industry together on a range of fronts as one of the big wins for the ACA during his tenure. “The pandemic showed us how, when we put our mind to it, when we want to, that we can really collaborate and achieve fantastic things. And we did. Some of the stuff that we did during Covid was fantastic but, unfortunately, as the pandemic ebbed away, so did all a lot of that sort of good stuff. “But I’ve never been more optimistic about the future of our industry because I’m finally seeing that people are realising that to get what they want, they have to help other people get what they want. It’s the old analogy of the rising tide lifting all the boats. “And with the amount of infrastructure, the amount of buildings that we’re being asked to construct just continuing to go up and up, and the available resources we’ve got to deliver that increasing pipeline going in the opposite direction … that is the only way and I think people will start to see significant changes embedded into the industry in the next year or two.” As for Davies, he intends to keep fighting the good fight for industry. “I will still be actively pushing for change. I’m more passionate about industry reform than I’ve ever been. But I think that with the experience and the learnings and the connections that I have, I can potentially do more to influence industry reform outside of ACA than within.”

Workers Laid Off Despite Looming Skilled Labour Shortages

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