Infrastructure expenditure affecting the Western Australian construction market

Over the last 12 months, there have been numerous reports of a skills shortage in the Western Australian building and construction industry – in both blue and white-collar sectors.  From our perspective, this is supported by anecdotal evidence and discussions with our clients.

In the 2012 boom, a much larger demand for blue and white-collar workers was largely met by the importation of skilled workers from both the Eastern States and overseas – especially it seemed from Ireland.

However, on this occasion, while the current boom is nowhere near that of 2012, there are a number of factors making it more difficult to top up the Western Australian building and construction industry from outside sources, particularly:

1. the ongoing impact of COVID-19 which restricts the mobility of the workforce both from the Eastern States, but also particularly overseas; and
2. healthy pay rates and availability of work in Melbourne and Sydney – especially on large government infrastructure projects such as Westconnex and Sydney Metro in Sydney and the Metro Tunnel and Westgate Tunnel projects in Melbourne.

This skills shortage plays out in a number of ways. On the blue-collar side, as workers are asked to perform works with minimal training or experience, the rate of defective works (both immediate and latent) will increase. On the white-collar side, as inexperienced contract administrators are thrust into roles that they are not yet ready for, critical steps in contract management will be missed or mishandled – leading to disputes overextension of time claims, and variations.

The above matters are compounded by supply delays (still being impacted by COVID-19) and will also soon be impacted by the changes to SOPA legislation in Western Australia.

All of the above suggests that, without significant care, the current mini building and construction boom will (yet again) be followed by a mini building and construction disputes boom.  To avoid or mitigate this cycle occurring yet again, industry participants need to allow realistic timeframes for works to be completed and ensure that they have systems in place to tick all the administrative boxes required to manage the works under the contract – especially with respect to delays and variations. It would also be an opportune time to check that their insurance programs are fit-for-purpose. To prepare your construction business for increased expenditure in the construction market consult our construction law team.

WA Construction Law Toolbox

The building and construction industry in Australia operates within a complex regime of written and unwritten laws. Moreover, written laws can vary between states significantly.

We have created a toolbox comprising a brief overview of the written and unwritten laws in which the building and construction industry operates in Western Australia.

Go to WA Construction Law Toolbox