Australia’s $242 billion infrastructure pipeline faces worker shortages amid energy and housing surge

Australia’s construction industry faces a critical moment as government spending on energy and housing injects billions into the nation’s infrastructure pipeline while worsening a severe worker shortage. Infrastructure Australia’s latest Infrastructure Market Capacity Report shows the five-year Major Public Infrastructure Pipeline has ballooned by $29 billion in the past year, reaching a record $242 billion. The growth marks the first rebound in two years and the highest level of public investment since national tracking began in 2020. Despite this growth, the report warns that the industry is projected to face a shortfall of around 300,000 workers by mid‑2027 as demand for infrastructure continues to accelerate. Utilities are driving the upswing, with investment in energy transmission projects forecast to more than double to $36 billion, while building projects, including social housing, are expected to climb $6 billion to $77 billion. Transport remains the largest slice of the pie at $129 billion, more than half of all spending. Infrastructure Australia chief executive Adam Copp said the record pipeline reflects governments’ renewed focus on long-term nation-building. “The pipeline shows governments are doubling down on energy transmission and housing projects in a bid to meet their targets, while continuing to deliver the major transport projects we need to enable Australia’s productivity and liveability for decades to come,” Mr Copp said. But behind the boom lies a growing problem. The industry is already short 141,000 workers needed to deliver current projects, and that shortfall is expected to surge to around 300,000 by mid‑2027 as housing, transport, and renewable energy projects accelerate. “This added demand will not come without challenges for the market; productivity growth remains sluggish, while worker shortages present a significant risk to the delivery of projects,” Mr Copp said. Regional areas set to feel the squeeze Ten regions across NSW, Tasmania and Queensland are forecast to see public investment rise by at least 200 per cent, with some areas tipped for much higher surges. While that presents an enormous opportunity for regional economies, the worker shortfall could hit them hardest. “Our analysis shows public and private sector ambitions to deliver renewable energy projects, including transmission lines, solar, wind and pumped hydro, are estimated to total $163 billion over the next five years, a significant proportion of which would be driven into our regions,” Mr Copp said. He said the massive investment could be a once-in-a-generation opportunity for regional areas, but unlocking it will require addressing three decades of stagnant productivity in the construction sector and ensuring there are enough skilled workers to deliver the projects. “We need to do more with less,” Mr Copp said. ‘We need to start investing in innovation’ The report warns that without major improvements in productivity and innovation, the gap between infrastructure demand and the industry’s capacity to deliver will continue to widen. “One of our key recommendations is for governments to incentivise the market to trial productivity-enhancing innovations such as modern methods of construction which can then be scaled, just like the UK, US, and Singapore have done,” Mr Copp said.“We’re also recommending the development of consistent nationwide training programs to upskill workers in these innovations. “We need to start investing in innovation rather than fixating on delivering at the lowest possible cost.” Infrastructure Australia said the construction sector’s reliance on traditional methods, coupled with slow productivity growth and supply chain vulnerabilities, had left the industry struggling to keep up with soaring demand. The independent adviser, which has tracked national supply and demand across the infrastructure sector since 2020, said this year’s record pipeline underscored both the strength and strain of Australia’s infrastructure ambitions.