CGC in Focus: Marketwrap - Infrastructure.

We take a broad look at the recruitment marketplace for Infrastructure, in the second of our four-part Market Wrap series discussing FY20 and the financial year ahead. In next year’s turbulent economy, Infrastructure will play a key role in job creation, backed by government spending on shovel-ready projects to kick-start Australia’s post-COVID economic recovery.

Several of our top Infrastructure experts have contributed to this special report. Our Managing Director Nick Curtis and Dan Kundi, Principal Consultant, Civil Construction discuss the state of the NSW market, while CGC’s Queensland Associate Director, Rory Todd, comments on QLD activity and the state’s upwards trend and industry optimism.

The State of the Infrastructure Market

Government investment continues to drive the Infrastructure sector in both of our operating regions. As NSW emerges from a year that sees some mega-project phases finishing up, there is a massive pipeline of government-backed infrastructure work ahead.

Queensland infrastructure has languished for six years, but with federal government funding committed, it will now ramp up strongly over the next two years, attracting professionals to the state from other regions to be involved in some of these major initiatives.

What is going to continue to drive the infrastructure industry is population growth and Australia continuing to be seen as a desirable place to live for new immigrants. The more people who come to live in our major city centres and neighbouring regions, the more pressure there is on our infrastructure, housing, hospitals and schools.

Both the government and the private sector need to step up and plan ahead.

CGC In Focus: The state of the infrastructure market

NSW Market Activity

In the last 12 months, NSW has enjoyed unprecedented investment and progress in the mega-projects that you hear about in the news. Thousands of employees have been working on initiatives such as the Parramatta Light Rail, WestConnex 3a and 3b, Western Sydney airport groundworks at Badgerys Creek, the rail station upgrades and the Snowy Hydro Scheme’s renewable energy project.

During this boom period for infrastructure investment, there's been some big winners and some big losers, with all parties now reassessing their positions. We anticipated this pipeline of projects would continue seamlessly, but in fact, as some project phases reached completion, over the last six months, there was something of a lull.

FY20 Challenges faced across the board were inflated salaries, cost blow-outs on mega projects, and the lack of available talent in the market, leading to the need for international candidate recruitment. Two elections within the space of six weeks and the amalgamation of Roads & Maritime Service with Transport for NSW have also had an impact.

Ultimately, there’s lots of work; however, these projects are only worth executing if there are positive commercial outcomes. We have seen government review their approaches to engaging direct employees, professional service contracts and labour hire. In the private sector, we have seen contractors streamline their operations. In addition, we have seen a shift on risk management as contractors and government seek to work more collaboratively for mutually beneficial outcomes.

We’re now moving into the second or third stages of these mega-projects, with those ramping up including the multiple rail stations, WestConnex 3A and 3B, Western Sydney Airport and ‘Snowy 2.0’. These and others create a $200 billion pipeline, which is a massive scope of work coming up for at least six years.

Queensland Activity

After the slump of the last five-six years, the Queensland market is now performing more strongly, with this upwards trend set to continue for at least the next four years. Major initiatives driving this growth include the Cross-River Rail, Brisbane Metro, TMR upgrades, Inland Rail, and the approval of Adani's controversial central Queensland mine.

While this boost in activity is welcome after the extended quiet times, from a recruitment viewpoint, CGC observes Queensland’s current challenges as being very similar to the issues that NSW has encountered in terms of industry resources.

For companies now needing to attract and hire well-qualified workers, one enticement will be the appeal for former Queensland workers of returning to Brisbane and SE QLD. Many professionals have needed to move south to NSW and Victoria in recent years to chase work and major projects, so there is a strong appetite to return to QLD to be involved in some of these new works, particularly the metro-based projects.

“I think for many people the attraction is about just being close to home, quality of life and a lower cost of living. That's going to make QLD a good candidate hunting ground.” CGC Queensland associate director Rory Todd.

But the overarching risk for all of these new projects is that they are driven by state and federal government funding, which influences decisions and procurement. That impacts on confidence and planning for private sector companies in terms of the resources they’ve invested in having the capabilities to win the work.

Key Recommendations and Looking Ahead to Financial Year 2020/21

There's much confidence in the future of infrastructure investment in Australia, but a fundamental lack of resources within mega-project delivery. The concern for these massive billion-dollar-plus projects boils down to resources, the risk profile around cost blow-outs and how to make them profitable.

With infrastructure projects to get a reported AU$1.5 billion boost from the federal government, in an attempt to push Australia's economy out of recession, there are huge opportunities. We understand the big recruitment issues, and this depth of insight can give both our clients and candidates confidence to make the right decisions.

To get a full breakdown of key Infrastructure recommendations plus CGC’s view on the year ahead, download our full CGC in Focus Report.

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CGC in Focus - Infrastructure Opportunities

At CGC Recruitment, our team of experienced consultants specialise in all major infrastructure, engineering and construction sectors. We help clients throughout Australia deliver their projects by attracting the best candidates and talent.

FY20 was a difficult year for most businesses – with elections (state and federal), rising unemployment, the drought, record national bushfires and, of course, COVID-19. It was a medical, a financial and a leadership crisis, all in one. That’s why we developed CGC in Focus, as a response to the unprecedented business environment, demonstrating where we see construction and engineering recruitment challenges and opportunities for both our clients and candidates to achieve positive personal, professional and commercial outcomes.

To download CGC in Focus click here, or connect with CGC today and one of our experienced consultants will be happy to help.