24 September 2010 – A new study from Davis Langdon has forecast that Australia will need to spend “trillions of dollars” on infrastructure and create up to 2.9 jobs in the sector as the population heads towards the 40 million mark by 2050.

The findings reveal that annualised work done by 2050 could be as high as 350 per cent of today’s annual investment.

Research manager for Davis Langdon Australian and New Zealand  Michael Skelton said that a growth strategy will be needed to direct infrastructure investment.

“The growing need for transportation, utilities and distribution of imports and exports requires planning and skills training to support these service areas,” Mr Skelton said.

“Australia’s prosperous economy, shortages in labour force and high standards of living are all attractions to foreigners looking to call Australia home, and the potential impact of a growing population on existing infrastructure requires a highly efficient and viable growth strategy.”

The study looked at three infrastructure demand scenarios, which build from the Australian Bureau of Statistics three estimates of Australia’s population by 2050, ranging from 30.2 million up to 39.6 million.

The results were based on the aggregate investment in road, rail, electricity generation and distribution, water storage and supply, sewerage, telecommunications, ports and heavy industry.

“Low infrastructure investment and low population projections would see the existing construction workforce grow by 170,000 (or 23 per cent) by 2050,” said Mr Skelton.

“High infrastructure investment and high population projections would result in an expansion of 219 million jobs (or almost three times more than current levels).”

According to the study, labour efficiency in the infrastructure sector has doubled over the past six years of the resources boom, with 16 jobs created per million dollars of work done compared to 8.9 jobs six years ago. While Australia’s infrastructure labour force now equates to 3.3 per cent of the total population, if demand for resources projects, community-based services and infrastructure continues to follow recent trends, the study projects that the infrastructure sector’s employment would represent up to seven per cent of the total population when compared to ABS population projections.

With the construction industry representing seven per cent of the National Gross Domestic Product, the impact of population growth will have a significant bearing on Australia’s future economic prosperity Mr Skelton said.

“High trade-based employment growth will be required to support the expanding resources industry – this will unquestionably require significant levels of skilled migration in the future.

“The resources boom has drawn trade-based resources to the minerals states of Western Australia and Queensland in search of the higher remuneration on offer.

“Consequently, a skills shortage has been developing in all states over recent years as ‘backfill’ trade employment in other states is left unfilled.”

Early planning is the key to sustaining future performance of the sector to prevent exacerbated skills shortages and wage price escalation,” Mr Skelton said.