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Skilled shortage, Western Australia 2018

12th January, 2018

Source: John Morley, LinkedIn

Coal Mine

Talking with employers in the resources sector over the past few months a common trend has emerged and that is EMPLOYMENT.

Australia is well on the way to a revival in exports and an income boost for iron ore, coking coal, thermal coal and LNG with demand and prices for these commodities beyond expectations. Gold, lithium and other commodities are also showing price stability and increases.

In part this demand is driven by our biggest customer, China and their internal requirements to close higher polluting steelmakers over the northern winter meaning cleaner mills running harder and buying higher quality steel ingredients to improve production.

So back to employment. Even though automation is steadily reducing the need for haul truck drivers as an example the need for service tradespeople is growing and is in part due to the age of mining fleets in WA, the older the fleet the higher the maintenance requirement.

To our discredit, what we didn’t do well in the past “boom” was manage our labour requirements resulting in, among other things thousands of tradespeople and their families leaving WA.

At the peak WA had annual increases of around 85,000 new people arriving and as we know this drove all sectors of our economy. Now we have annual population increases closer to just 20,000 a year and that is well below our historic annual growth of 45,000.

We now have a noticeable shortage of qualified tradespeople and a trust issue around enticing those people back to WA from the east coast and New Zealand. Job satisfaction, security and moving/relocation costs are barriers employers now face.

Fortunately there are two pull factors to entice those people back, they are good pay rates (HD Fitters around $60pr) and affordable housing. Generally, houses in WA now are cheaper than they were ten years ago.

WA property values are some of the most affordable in the country and the oversupply of housing seen over the past few years has mostly been “soaked up.” Interest rates remain at historic lows also, so it is just a matter of time before we see renewed demand for housing from returning families and investors who see the growth opportunities here in WA.

I have noticed employers are aware of the looming labor shortage though are reluctant to face the prospect just yet, when it turns it will turn fast.

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