Tight Times For Apprentices

The pull-back in building activity and the ‘pivot’ to infrastructure means builders are losing their appetite for new apprentices.

Construction apprentice commencements are now averaging under 1,300 per quarter in Queensland, compared to 1,600 at the peak of the residential boom in 2016.

14% fewer apprentices commenced in the 12 months to Dec 2018 (latest data at June 2019) than in the same period a year prior. This decline is running well ahead of the national trend.

Commencements Aus and Qld

Construction apprentice commencements are strongly correlated with the volume of residential and commercial building work done. This allows us to reliably predict future commencements based on forecasts of building activity.

We capture these predictions in the CSQ Apprentice Tracker. The Tracker currently points to ongoing declines in construction apprentice commencements for the foreseeable future in Queensland.

Commencements and model

Not since the Global Financial Crisis (GFC) has there been so much uncertainty around the construction industry in Queensland.

In uncertain times, construction businesses tend to reduce their training intensity. This simply reflects that apprentices represent a labour cost which employers naturally seek to calibrate to the rises and falls of the business cycle.

Employers prefer to make these calibrations on commencements rather than those in-training. In a falling market, employers will generally slow their hiring of new apprentices rather than lay-off existing apprentices.

This is precisely what has been happening over the last 12 months. As the downturn washes out we fully expect these declines in apprentice commencements reverse.