Unprecedented. On fire. Hot. Not like anything I’ve seen in 35 years. These were just some of the superlatives used to describe the booming infrastructure market for engineering in Australia this week.
The cause? A new found synchronicity of infrastructure projects in Melbourne and Sydney, itself unusual and a scale of work equally unknown.
The consequences are contracts for new employment presented to the old boss just in case he or she wants to match what’s on offer, generally 25-30 per cent more. At the higher end specialised staff are ending up with up to 40 per cent improvement in their yearly pays.
According to an insider, the market is “on fire”.
“Every single leader in the business can’t get enough people … any kind of engineer you can think of, including in sustainability.
“People can pretty much name their price. It’s not unusual for staff to come with a contract from a competitor and say ‘match this’ or they’re gone.
“In the major project space you can look at anything from 20-30 per cent.”
In Sydney, Walker Corporation alone is adding to the workload for this consulting company (and others) with its crop of four major buildings at $2 billion Parramatta Square project, where National Australia Bank will take up 42,000 square metres and Property NSW 63,000 sq m.
(Nice to see that the first two buildings, designed by Johnson Pilton Walker, will have a focus on “workforce health, well-being and productivity in order to raise efficiency and inspire creativity” and that Parramatta Square will be built to a minimum 5 Green Star As Built Rating.)
It will be even busier when the Melbourne Metro gets under way, the consulting source said.
Arcadis managing director infrastructure Phil Kajewski agreed with the outlook and said the jobs market for engineering is “unprecedented, hotter than I’ve seen it in 35 years … much much hotter”.
And it’s all state driven.
“The rate of expenditure in NSW is more than we’ve ever seen before. It’s at unprecedented levels.”
Especially, he said, as it’s focused on the two biggest markets in Australia, Melbourne and Sydney, which were booming at the same time but normally were on different cycles.
“In terms of economics these are the ‘engine rooms of the country’,” he said.
What was more interesting is that the markets were undergoing prolonged peaks.
Four years ago, he said, Adelaide was going through a “large amount of project work”, Kajewski said.
“It felt like half the engineering community in the airport lounge in Melbourne on a Monday were commuting to Adelaide.”
There’s now a similar commute from Brisbane and Western Australia to Sydney and Melbourne, he said.
Melbourne had a history of building a tunnel every decade or so but it now has two on the way for the Melbourne Metro and the West Gate Tunnel project.
Sydney had a history of one tunnel at a time; there were now four, possibly five on the way.
Investing tipping towards public transport
The good news is that infrastructure spend was previously divided about 95 per cent towards roads and five per cent public transport but the split was these days about even, possibly tipping slightly public transport’s way.
This was a phenomenon that was likely to grow given the focus on urban density and connectivity (very much the latest buzzword given the talk coming out of the Council on Tall Buildings and Urban Habitat conference juggernaut starting to make its way around the country this week).
“I think rail is staying high on the agenda. It’s the only way major centres are going to keep pace with growth and the need for mobility,” Kajewski said.
Regional and interstate rail were still a thorny issue. Fast rail might come but it would take a decade or two and needs to be balanced with the ability to attract value to regions it passed through.
For now, though, the upshot is that the engineering community had “pretty much topped out” in terms of capacity.
In addition, while Australia has historically been good at highway engineering in terms of “design, build and construct as good as anyone in the world” there was not such a reservoir of expertise in rail for instance and engineers are being sought from the UK and Europe.
“We’re really tapping overseas markets. Europe has a good pedigree with consistent investment in rail, particularly with metro rail. So people are being brought out from there,” Kajewski said.
But the top echelons of the profession, it seems, knows its value.
It was inevitable that companies would pay steep salary increases to stop competitors from enticing staff their way and figures of 25-30 per cent increases were not unheard of, he said.
“If you have a design job and it’s going south it could make your life hell if your principal engineers leave. No one wants to go down that path.”
In new jobs some top staff have had rises of 40 per cent in take home salaries.
The response from his company was a stronger focus on engagement with staff and loyalty building programs.
Staff is also coming across from other sectors such as residential, which is coming off the boil.