Sixty per cent of firms surveyed by the agency said labour and skills remained the biggest risks to delivering projects.
Of the forecast worker shortage, regional parts of the country will face the biggest strain.
The current shortage in regional areas will climb from 38,200 now to 181,000 by 2027. The shortage in capital cities is expected to lift modestly, from 131,700 to 148,000 before starting to ease as major projects come to an end.
Queensland’s Sunshine Coast, Toowoomba and Wide Bay, plus the Murray, Riverina, Hunter Valley and New England areas of NSW are most exposed to a worker shortage.
That is due to a surge in public investment in those areas. Almost $700 million, made up largely of new energy projects, is planned for the New England area alone, and $550 million is earmarked for the Sunshine Coast.
Trades workers and labourers account for more than 60 per cent of the expected worker shortage.
Copp said lifting productivity across the infrastructure sector would be pivotal to delivering projects, particularly in regional areas.
New production methods such as pre-fab housing could reduce costs facing the construction sector.Credit: Kate Geraghty
“With community buy-in, this mammoth investment presents a once-in-a-generation opportunity for these regions. But to unlock it effectively and ensure we have the people power to do the job, we need to turn the page on three decades of stagnating productivity in construction. We need to do more with less,” he said.
“We need to start investing in innovation rather than fixating on delivering at the lowest possible cost.”
Across both private and public infrastructure, the agency estimates $163 billion is earmarked for renewable energy projects including transmission lines, solar farms and pumped hydro. Most of that is planned for regional areas.
There are signs that price pressures are starting to ease for infrastructure projects.
The agency noted that the prices of key construction materials such as timber and cement had largely tracked overall inflation over the past 12 months.
Steel prices, however, have dropped with a substantial increase in imports of cheap fabricated steel. Imported steel is up to 50 per cent cheaper than domestic production.
The report was released after new figures from the Australian Bureau of Statistics revealed the number of new mortgages taken out by investors hit a record high in the three months to the end of September.
Investor loans jumped by 13.6 per cent in the quarter to 57,624. The previous record for investor loans of 52,787 was set in March 2022 when official interest rates were 0.1 per cent.
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Loans for owner-occupiers also increased in the quarter, reaching a three-year high of 83,846, of which 29,637 were to first-time buyers.
The lift in investor loans has prompted speculation that the Australian Prudential and Regulation Authority may use so-called macro-prudential rules to restrict the share of bank loans given to investors.
Greens housing spokeswoman Barbara Pocock said the last time the authority tightened investor loans was between 2014 and 2018, which helped slow house price growth.
“Australia needs to get back into the business of giving loans to owner occupiers rather than property investors – and if the government won’t do it, then APRA should,” she said.
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