While Victorian construction sites buzz with a staggering 282,400 workers and contribute over $42 billion to our economy, the industry is navigating a complex landscape of soaring wages, urgent skills shortages, and ambitious workforce evolution.
Key Takeaways
- In March 2023, Victoria's construction industry employed 282,400 full-time equivalent workers, marking a 2.1% increase from the previous quarter.
- As of June 2022, 14.2% of Victoria's construction workforce were apprentices and trainees, totaling approximately 28,500 individuals.
- Women represented 13.5% of the Victorian construction workforce in 2021, up from 11.8% in 2016.
- Victoria's construction industry contributed $42.1 billion to state GDP in 2021-22.
- Chain volume growth in Victorian construction output was 4.2% in 2022-23.
- Residential building contributed $28.5 billion to Victoria's construction value in 2022.
- Residential building approvals in Victoria totalled 48,200 dwellings in 2022.
- Value of residential building approvals in Victoria reached $25.6 billion in FY2023.
- Detached house approvals in Victoria numbered 22,100 in 2022, down 5% from 2021.
- Fatalities in Victorian construction numbered 12 in 2022.
- Lost time injury frequency rate (LTIFR) in construction was 1.8 per million hours in 2022.
- 4,200 serious claims were lodged by construction workers in Victoria in 2021-22.
- Construction output in Victoria is forecast to grow 3.5% annually to 2027.
- Residential construction starts projected to reach 55,000 dwellings by 2025.
- Infrastructure pipeline valued at $125 billion over next 10 years in Victoria.
Victoria's construction industry is growing with strong employment and investment despite persistent skills shortages and safety challenges.
Building Approvals and Starts
- Residential building approvals in Victoria totalled 48,200 dwellings in 2022.
- Value of residential building approvals in Victoria reached $25.6 billion in FY2023.
- Detached house approvals in Victoria numbered 22,100 in 2022, down 5% from 2021.
- Multi-residential approvals in Victoria surged 18% to 26,100 units in 2023.
- Melbourne's metropolitan area accounted for 78% of Victoria's residential approvals in 2022.
- Semi-detached and townhouse approvals totalled 9,800 in Victoria in FY2023.
- Building starts for houses in Victoria were 18,500 in Q4 2022.
- Non-residential building approvals valued $8.4 billion in Victoria in 2022.
- Retail building approvals in Victoria totalled $2.1 billion in 2023.
- Office building approvals in Victoria were $1.9 billion in FY2022-23.
- Factory and warehouse approvals reached $3.2 billion in Victoria in 2022.
- Aged care facility approvals in Victoria valued $850 million in 2023.
- Approval times for residential builds averaged 120 days in Victoria in 2022.
- 15,200 residential dwellings commenced construction in Victoria in 2023.
- Regional Victoria saw 9,500 building approvals, 22% of state total in 2022.
- Hotel and motel approvals valued $650 million in Victoria FY2023.
- Educational building approvals totalled $1.7 billion in Victoria in 2022.
- Health building approvals were $2.3 billion in Victoria in 2023.
Building Approvals and Starts Interpretation
Victoria's construction industry is feverishly trading spacious backyards for vertical villages, proving that while the dream of a detached home might be gently deflating, our collective ambition is skyrocketing into densely packed, multi-billion-dollar layers of apartments, warehouses, and essential infrastructure.
Economic Impact
- Victoria's construction industry contributed $42.1 billion to state GDP in 2021-22.
- Chain volume growth in Victorian construction output was 4.2% in 2022-23.
- Residential building contributed $28.5 billion to Victoria's construction value in 2022.
- Non-residential construction investment in Victoria reached $15.7 billion in FY2023.
- The multiplier effect of construction spending in Victoria generated $2.50 in broader economic activity per $1 spent in 2022.
- Construction accounted for 9.2% of Victoria's total gross state product in 2022-23.
- Engineering construction work done in Victoria totalled $22.3 billion in 2022.
- Tax revenue from Victorian construction firms was $4.8 billion in 2021-22.
- 1,250 construction businesses in Victoria went into liquidation in 2022.
- Average profit margin for Victorian construction SMEs was 3.8% in 2023.
- Construction exports from Victoria, mainly prefabricated components, valued $1.2 billion in 2022.
- Public sector construction expenditure in Victoria was $18.9 billion in 2022-23.
- Private sector investment drove 62% of Victorian construction growth in 2023.
- Inflation in construction costs in Victoria hit 7.5% in 2022.
- Victorian construction firms' total revenue grew 6.3% to $145 billion in 2022.
- Wage costs represented 32% of total construction expenses in Victoria in 2023.
- R&D expenditure by Victorian construction industry was $450 million in 2021.
- Construction bankruptcy rate in Victoria was 1.2 per 100 firms in 2023.
- Total value of construction work commenced in Victoria was $112 billion in 2022-23.
Economic Impact Interpretation
Despite the industry being a colossal, $145 billion-revenue engine driving nearly a tenth of Victoria's economy, its tight 3.8% profit margins and a grim parade of 1,250 liquidations reveal a sector building prosperity on a foundation as precarious as it is powerful.
Forecasts and Trends
- Construction output in Victoria is forecast to grow 3.5% annually to 2027.
- Residential construction starts projected to reach 55,000 dwellings by 2025.
- Infrastructure pipeline valued at $125 billion over next 10 years in Victoria.
- Construction employment expected to rise 25,000 jobs by 2026.
- Green building certifications to increase 40% by 2025 in Victoria.
- Modular construction share projected to hit 15% of market by 2028.
- Cost escalation forecast at 4-6% per annum through 2025.
- Non-residential growth at 5.2% pa to $28 billion by 2027.
- Labour shortages to persist, with 20% vacancy rate until 2025.
- Digital adoption in construction to reach 65% by 2026.
- Prefab and offsite manufacturing to grow 12% pa to 2028.
- Renewable energy projects to add $15 billion in construction value by 2030.
- Housing supply shortfall projected at 300,000 homes by 2030.
- BIM usage to be mandatory on 80% of public projects by 2025.
- Carbon emissions from construction to fall 25% by 2030.
- Regional construction growth forecast at 4.8% pa vs metro 3.2%.
- Supply chain disruptions to ease, reducing delays by 50% by 2025.
- Investment in transport infra $50 billion over 5 years.
- Health infrastructure spend $20 billion to 2028.
Forecasts and Trends Interpretation
Despite the future's gleaming promise of efficiency, sustainability, and frantic building, Victoria's construction industry remains a masterclass in controlled chaos, where solving a housing crisis, modernizing digitally, and enduring labour shortages are all happening simultaneously, just at a 4-6% annual markup.
Safety and Incidents
- Fatalities in Victorian construction numbered 12 in 2022.
- Lost time injury frequency rate (LTIFR) in construction was 1.8 per million hours in 2022.
- 4,200 serious claims were lodged by construction workers in Victoria in 2021-22.
- Falls from height accounted for 28% of construction fatalities in Victoria 2018-2022.
- Musculoskeletal disorders represented 42% of construction injury claims in 2022.
- WorkSafe Victoria issued 1,450 improvement notices to construction sites in 2023.
- Heat-related incidents in construction rose 15% to 320 cases in summer 2022-23.
- 65% of Victorian construction firms reported safety training for all workers in 2022.
- Vehicle incidents caused 12% of construction injuries in Victoria in 2021.
- Provisional improvement notices issued numbered 850 in construction 2022.
- Mental health claims in construction grew 22% to 1,100 in Victoria 2022.
- High-risk work licences issued totalled 45,000 for construction in 2023.
- Dust disease notifications in construction were 180 in Victoria 2022.
- Safety compliance audits conducted 2,500 on Victorian construction sites in 2023.
- Crane-related incidents totalled 45, with 2 fatalities in 2022.
- Fatigue-related incidents reported 620 times in construction 2023.
- Electrical incidents caused 8% of serious injuries in 2022.
- Asbestos exposure claims numbered 250 in construction 2021-22.
- Safety fines totalled $12.5 million for construction breaches in 2023.
- Near-miss reporting increased 30% to 15,000 incidents in 2022.
Safety and Incidents Interpretation
While the statistics paint a grim picture of relentless hazards—from deadly falls and dust diseases to soaring mental health claims and heat stress—the surge in near-miss reports and safety fines suggests an industry finally, if painfully, waking up to the fact that its most critical foundation must be a culture of vigilance.
Workforce and Employment
- In March 2023, Victoria's construction industry employed 282,400 full-time equivalent workers, marking a 2.1% increase from the previous quarter.
- As of June 2022, 14.2% of Victoria's construction workforce were apprentices and trainees, totaling approximately 28,500 individuals.
- Women represented 13.5% of the Victorian construction workforce in 2021, up from 11.8% in 2016.
- The average weekly earnings for full-time construction workers in Victoria reached $2,150 in May 2023.
- In 2022, 45% of Victorian construction firms reported skills shortages in trades like carpentry and electrical work.
- Victoria's construction sector had a labour productivity growth of 1.8% annually from 2018-2022.
- Over 65,000 construction workers in Victoria were aged 45 and over in 2021, comprising 24% of the workforce.
- Indigenous workers made up 1.2% of Victoria's construction employment in 2022, with targeted programs aiming for 2% by 2025.
- In 2023, 22% of Victorian construction projects faced labour shortages delaying completion by an average of 8 weeks.
- The construction industry's unemployment rate in Victoria was 3.2% in Q1 2023, below the state average of 3.9%.
- Vocational training commencements in construction in Victoria rose 15% to 42,000 in 2022.
- 18,700 construction jobs were created in Victoria in the year to June 2023.
- Migrant workers accounted for 28% of Victoria's construction workforce in 2022.
- Part-time employment in Victorian construction grew to 12% of total jobs in 2023.
- 7,200 construction supervisors were employed in Victoria in 2022.
- Youth under 25 made up 16% of Victoria's construction workers in 2021.
- Construction job vacancies in Victoria surged 45% to 12,500 in 2023.
- 32% of Victorian construction workers held post-secondary qualifications in 2022.
- Overtime hours in Victorian construction averaged 4.2 hours per week in 2023.
- Disability employment in construction in Victoria was 4.1% in 2021.
Workforce and Employment Interpretation
Victoria's construction industry is galloping along with strong growth and high wages, yet it's simultaneously being held together by duct tape and ambition, wrestling with significant skill gaps, desperate to attract more diverse talent, and nervously eyeing a quarter of its workforce nearing retirement.
Sources & References
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- Reference 2SKILLSskills.vic.gov.auVisit source
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- Reference 12HOUSINGhousing.vic.gov.auVisit source
- Reference 13PLANNINGplanning.vic.gov.auVisit source
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- Reference 16REGIONALDEVELOPMENTregionaldevelopment.vic.gov.auVisit source
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