The latest release from the Australian Bureau of Statistics (ABS) regarding Construction Work Done reveals a modest increase in the value of total construction work, which rose by just 0.1 per cent in the June quarter and 1.2 per cent over the past year.
This marginal growth comes amid significant wage increases in the sector, with an annual rise of 18 per cent and a quarterly rise of 10 per cent, as highlighted by Ben Thompson, CEO and Chief Economist at Employment Hero.
Thompson’s analysis, based on the SmartMatch Employment Report for July, underscores a troubling disparity between wage growth and the value of work done.
Despite a 4.8 per cent increase in employee growth over the year and 2.8 per cent over the quarter, the construction sector’s efforts to expand its workforce have not translated into proportional value creation.
This gap highlights the challenges and insolvencies the industry has faced over the past two years.
The construction industry is grappling with “wageflation”, where employers are pressured by unsustainable wage growth.
This situation is exacerbated by the rising costs of construction materials and compliance, posing ongoing challenges for businesses that could have broader negative economic implications.
Thompson emphasises the need for increased efficiency within the sector, advocating for wage transparency to provide job seekers with a realistic understanding of their market value and to equip employers with tools to manage staffing costs effectively.
This approach aims to balance the interests of both employees and employers, helping the construction industry navigate the current economic landscape.
