Labour skills shortages

Survey respondents were asked to advise on the state of labour skills shortages in their local market. Are there trades labour skills shortages or is the market in balance or even in surplus?

The proportion of regions experiencing skills shortages continues to increase. Two thirds of the markets in this year’s survey are experiencing skills shortages.

The number of regions ‘in balance’ has fallen while the proportion of regions with a skills surplus remained constant.

As might be expected, hot and overheating markets are experiencing skills shortages. None of these regions said their markets were in balance. For many high-cost countries, skills shortages are a near perpetual problem, easing only when the market dips into recession.

Underlining the persistence of skills shortages is that some regions with a cold market still reported trade skills shortages, such as Johannesburg and Northern Ireland. Perth remains a cold market, but the skills situation is regarded as in balance.

Eleven regions considered lukewarm are still reporting skills shortages. This raises the question of where labour will come from as and when these markets heat up from lukewarm to hot. Some may come for other occupations such as agriculture where the operation of heavy machinery is common, others from service-based occupations.

Barriers to entry

Often in the high-labour-cost regions barriers to entry can be significant, such as a requirement for labour to have trade permits, licences or ‘tickets’. The ease with which additional labour can be mobilised will influence cost inflation. Where it is hard to employ additional labour quickly, wages often increase through competitive bidding, ultimately ending in higher construction costs.

Read more about ICMS 2019